Baseball91's Weblog

February 18, 2013

Competitive Currency Debasement

Filed under: Competitive Currency Debasement,currency,Monetary Wars — baseball91 @ 7:28 PM
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Toxic waste. There was spillover on other neighboring countries from competitive currency debasement.

In the words of Kevin Kersten, SJ, life in the modern world has many sorts of enmities, whether between a husband and wife on the brink of divorce; a child abused by a parent; between rich and poor; between cheaters and the cheated; between adversaries in civil war; between bullies and their victims. “Whatever the sort of enmity between nations at war, only two options occur to me as possible for those embroiled in enmity: To let it be, or deal with it.  Really, there is no ‘in between’.”  

Exchange rate management: Over the past four months, the Japanese yen has risen in price from 78 to up around 94 US dollars. Japan was the last nation to follow a monetary policy for domestic considerations, which as a collateral consequence has seen a dramatic weakening of the yen against other currencies.

This weekend, the G20 refrained from censuring Japan and implicitly sanctioned similar conduct by other G20 nations. Criticizing Japan would have made other countries – particularly the US – also a legitimate target for criticism by other G20 members.

The internal discussion within the euro nations would now be over the euro’s rise on the foreign exchanges with or without a need to be brought under control? With a current-account surplus in Germany’s economic growth in 2013 for six out of the past seven years – six percent of gross domestic product last year – while France carried a deficit of 2 percent for 2012, the German people can live with a euro above $1.30 (or maybe even $1.40) much more than France and its other western neighbors, writes David Marsh. And with so little chance to meet its growth and budget-deficit targets this year, France is at odds with the policy of Angela Merkel’s government, the European Central Bank, as well as the Bundesbank. Because it is an election year in Germany, should a currency war break out in 2012, it likely will be between France and Germany. So the G20 backed off from addressing competitive currency debasement, to let the civil war begin within the European Union.

And so market forces, in bond market and stock markets, along with the current events since September 2008, for currency markets. For all currencies to be equally subject to the impartial discipline of a truly free and fair global market, no government today leaves the exchange rate of its currency to market forces, trying to use their competitive advantage.

“Letting an enmity be will likely make it worse.  Recrimination will increase.  Old hurts will get bruised and new ones will be perpetrated.  Grudges and resentments will fester.  Violence and bloodshed may even happen.  And all this will occur for the enemies facing one another from the two sides of a divide.” –Kevin Kersten, S.J.

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2 Comments »

  1. Since April 4 through April 12, 2013, the Japanese yen has depreciated against all 16 of its most-traded peers. The yen has declined another 2.2 percent to the U.S. dollar, 3.5 percent to the euro, and 2.8 percent to Australia’s dollar.

    Comment by baseball91 — February 19, 2013 @ 1:42 AM | Reply

  2. In an update in the monetary wars involving currency, which has been funding without tax increases the wars in Iraq and Afghanistan and the ‘War on Terror,’ “nations worldwide are tired of funding the America’s ‘military adventurism by being a party to the “Empire of Debt,” as it’s known around the world – the US dollar,’ and will therefore likely join the de-dollarization movement, Timothy Max Keiser said.”

    China has made the decision to price oil in their own currency, the ‘Yuan’ by way of a new gold-backed futures contract later this year. China is preparing to launch the petro-Yuan that will change the dynamics of the world’s economy and eventually threaten the U.S. dollar as the world’s reserve currency.

    “The petro-Yuan threatens the U.S. dollar’s hegemony around the globe as several nations recently demonstrated their shared interest in joining the transition to the petro-Yuan from the U.S. dollar for oil transactions, Iran, Venezuela and Indonesia. China (the largest holder of U.S. debt) is the largest importer of oil, while Russia, one of the largest exporters of oil in the world have agreed to use the petro-Yuan to bypass the petro-dollar. Both Russia and China aim ultimately reduce their dependency on the greenback, limiting their exposure to the politics of American sanctions regimes an as well as to U S currency risk.”

    However, there is the propaganda if not self-promotion associated with the the stations who carry Max Keiser’s message. Speaking of sanctions, RT is owned by the Russian government. Until 7 years ago, American Timothy Maxwell “Max” Keiser anchored On the Edge, a program of news and analysis hosted by Iran’s Press TV. He hosts a financial program broadcast on Russian state media channel RT that features heterodox economics theories.

    Near the end of World War II, a plan was devised to create a new economic system with the international economic system in shambles. By July 1944, with more than 730 delegates signed at the United Nations Monetary and Financial Conference in Bretton Woods, New Hamphire, the historic Bretton Woods agreements was the plan for a system of regulations that led eventually to the creation of the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF). The framework of the Bretton Woods agreements was to control the value of money between various countries, with the IMF’s main purpose to prevent any temporary imbalances of payments.

    Comment by baseball91 — November 29, 2017 @ 9:32 PM | Reply


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