Let the Currency Wars Begin?
- Last week the Swiss National Bank decided to weaken the Swiss Franc against major currencies. More and more countries are taking the beggar thy neighbor policy route of competitive devaluation. Financial Times reports :
Swiss action sparks talk of ‘currency war’
The Swiss National Bank moved to weaken the Swiss franc on Thursday, the first time a big central bank has intervened in the foreign exchange markets since Japan sought to weaken the yen in 2004.
The bank’s move, which sparked fears that other countries could follow suit, comes as the value of the Swiss franc has soared as investors seek a haven from the recent market turmoil. In October, after the collapse of Lehman Brothers, it rose to a record high of about SFr1.43 against the euro, a level it has come close to again in recent weeks.
But it fell to its lowest level this year on Thursday after the SNB said the currency’s strength represented an “inappropriate tightening of monetary conditions” as it battled against a slowdown in the Swiss economy.
Analysts said the move was likely to increase talk that countries were set to engage in a bout of competitive devaluation.
“Let the currency wars begin,” said Chris Turner at ING Financial Markets. Countries around the world faced with the constraint of zero interest rate levels might feel it was acceptable to intervene to weaken their currencies in order to ease monetary conditions, he said, adding that other export-dependent economies such as Japan would “probably be at the head of the queue”.
- Over the weekend, Canada and the IMF are hinting at upcoming Quantitative Easing moves. This is printing a huge amount of money out of thin air to re-inflate the economy. It is stoking hyper-inflationary fears. Why should I have confidence in the corrupt and incompetent idiots in power when they tell me QE is the solution? In the first place, Western governments have gotten us into this deflationary mess. Reuters reports :
Bank of Canada hints at quantitative easing moves
March 14 (Reuters) – The Bank of Canada hinted on Saturday it could soon start printing money to create growth after a global pledge by central banks to take extreme action as economic conditions deteriorate.
G20 central bankers, meeting with finance ministers ahead of the London summit on April 2, signed up to a statement to keep interest rates low for as long as it took to get the economy back on its feet and engage in quantitative easing if needed.
The Bank of Canada has already said it will soon outline a framework for quantitative and credit easing, giving it the means to conduct similar actions to the Bank of England and Swiss National Bank.
- The Daily Telegraph reports :
IMF poised to print billions of dollars in ‘global quantitative easing’
The International Monetary Fund is poised to embark on what analysts have described as “global quantitative easing” by printing billions of dollars worth of a global “super-currency” in an unprecedented new effort to address the economic crisis.
Alistair Darling and senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression.
Should the move, which is up for discussion by the summit of G20 finance ministers this weekend, be adopted, it will represent a global equivalent of the Bank of England’s plan to pump extra cash into the UK economy.
However, economists warned that the scheme could cause a major swell of inflation around the world as the newly-created money filters through the system. The idea has been suggested by a number of key figures, including billionaire investor George Soros and US Treasury adviser Ted Truman.
Simon Johnson, former chief economist at the IMF, said: “The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them. “The objective is to create a windfall of cash. However if everybody goes out and spends the money it could be very inflationary.”
- The IMF printing trillions of dollars out of thin air? And this will help the global economy? I don’t think so. This will destroy fiat currencies and economies worldwide in hyper-inflation. The banksters are really trying to force the world into accepting their planned 1 World Currency and New Financial Order!
- The approximately US$10T which the US government has thrown onto the problem has not help their economy. US$10T is sufficient to buy up about 90% of all outstanding mortgages in America. The entire US economy is around US$13T. Ask yourself this: where did the money go? Why are so many tent cities springing up across America? Alot of hanky panky going on: fraud and theft on a major scale!
- The world is heading towards a : Global Monetary Meltdown in 2009 . When fiat currencies collapse people will run to real money throughout the ages: GOLD !
- See also:
World Financial System in a State of Insolvency !
Gold About to SkyRocket ! China Worries about Treasuries and Diversify into Gold !
European Banks may need US$ 23 Trillion Bailout !
Gold Price Set to Soar !
What’s not to Like about Gold ?
Dollar Devaluation, Debt Default & Gold
Massive US Dollar Devaluation Against Gold During 2009
Gold Rush Worldwide!
Celente – Code Red ! Economy in Collapse !
GEAB : Systemic Economic Crisis: The Sequence of Global Insolvency Begins
Global Financial & Economic Meltdown
GEAB forecasts Next Financial Tsunami in March 2009
American & British Banks are Bankrupt!
Economic Collapse of 2009 – Greater than Great Depression of 1929
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