BRICS' Sabres Rattle as Global Currency War Heats Up!

• The world is heading towards a global currency crisis. All fiat currencies, not just the USD, are heading down the path of currency debasement vis-a-vis hard asset like gold. Think hyperinflation and the destruction of fiat currencies!
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  Brics’ sabres rattle as global currency war heats up! 
  by Matt Quigley,
  http://mg.co.za/
   
  The US is escalating the risks of a currency war, Brics nations say. Matt Quigley explores the consequences if the US doesn’t “knock it off”.
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  As political rhetoric heats up, fears are mounting that a global currency war may escalate—concerns explicitly expressed by the Brics countries—Brazil, Russia, India, China and South Africa—in a recent communiqué.
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  “Excessive liquidity from aggressive policy actions taken by central banks to stabilise their domestic economies have been spilling over into emerging economies,” they wrote following a summit in India, “fostering excessive volatility in capital flows and commodity prices”. In diplomatic speak, that’s the equivalent of “knock it off”.
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  The implied threat—particularly from Brazil—is “or else”. Driving the point home, Brazil’s President Dilma Rousseff reiterated the group’s concerns to US President Barack Obama at meeting in Washington in April. “Expansionist monetary policies,” she said, “ultimately lead to depreciation in the value of the currencies of developing countries, thus impairing growth outlooks.”
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  What exactly is going on, and should South Africa worry? What is a currency war? “The first point to note is that we use the term very loosely,” John Cairns, a currency strategist at Rand Merchant Bank told the Mail & Guardian.
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  ‘More of a cold war than a hot war’
  At the tamest end of the spectrum, currency wars are more a battle of words than a battle of actions. Politicians, concerned about their own countries’ competitiveness in global markets, complained that other countries are gaining an unfair advantage by cheapening their currencies, making their exports cheaper than those of their competitors. Cairns characterised this type of conflict—which he said is ongoing—as “more of a cold war than a hot war”.
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  Brazil’s finance minister Guido Mantega first alleged that the developed world’s monetary policies were hurting emerging markets, like his own, in 2010. Brazil has been complaining about the US ever since. Meanwhile, the US is peeved at China, as is Japan. And Switzerland is far from pleased with its European neighbours. The situation is tense, but manageable.
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  At the other end of the spectrum is an all-out currency conflagration. This can get ugly as governments across the world deliberately devalue their currencies in an attempt to gain a competitive advantage. The problem is that devalued currencies—although they make exports cheaper—make imports more expensive, diminishing purchasing power.
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  These race-to-the-bottom conflicts are rare. But when they occur, they can have disastrous consequences for international trade and, in turn, global growth. The most notable example of a truly global “hot” currency wars occurred during the Great Depression.
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  read more!

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