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February 08, 2015, 01:17:00 PM |
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They must coordinate their QEs, because if they do not, they would not be working. But the problem it is QEs are not working for the people or the economies, they are working just to prop up failed governments, failed banks and a few failed or failing industrial complexes. They are a way to siphon out purchasing power from the people, the working people, and siphoning in the politically connected elites. So they act in a way to distract people, the do a Qe in 2009, another in 2012, another in 2015 in the US. And other central banks do the same when the fed it is not doing it. In this way, the Central bank of a country is syphoning out the purchasing power of the assets denominated in his currency. If someone is smart, move to another currency, but the other central bank will syphon out the purchasing power just a few months later. If too much people move too much wealth from a currency to another, the exchange rate change and the receiving currency's central bank start printing (like the SCB with the Swiss Franc).
So, the only safe heavens are commodities like gold, silver, platinum, palladium, bitcoins, etc.
The problems we see now are just appetizers. The real problems (and the opportunities too) will show up when people will start to be fed up with their currency and recognize the other are not so much different. They all are running to the bottom and if you do not want to get to the bottom, you must ditch them all, together. When the people will be fed up, they will just try any way to get rid of their currency. They will buy anything durable just to keep up their purchasing power. In Venezuela people with savings buy Mercedes not because they need or like a Mercedes, just because the Mercedes keep its value better than the Bolivar in one year or in two. Prostitutes just earn more from selling their hard earned USD than they do selling their services to the foreign sailors paying in USD. This is the moment we will see hyperinflation.
If another currency that keep its value and can not be inflated at will will be available and can be easily adopted (like Bitcoin) the people will move there and no amount of government's violence will prevent them from going there. Just because they need to have money to eat. In Zimbabwe the government destroyed the currency and now they have no government produced legal tender. Now they just have five or six foreign currency as legal tender (USD, EURO, UK Pound, Sud Africa Rand, Yuan and Yen).
If the biggest, largest, currencies start all together being ditched by their users because they are become a tool to syphon out their wealth, Bitcoin will be available to fill in the void left.
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