Weidmann warns of currency war risk

[mufa23]

Saw this article linked from the Drudge Report, and thought some of you guys might be interested. Perhaps this attributes to the recent rise in BTC prices. I checked the difficulty chart, and this seems to be some sort of panic buying.

http://www.ft.com/intl/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html#axzz2Ij3jqg21

EDIT: 2nd Link - http://www.ft.com/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html

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[deadweasel]

Saw this article linked from the Drudge Report, and thought some of you guys might be interested. Perhaps this attributes to the recent rise in BTC prices. I checked the difficulty chart, and this seems to be some sort of panic buying.

http://www.ft.com/intl/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html#axzz2Ij3jqg21

It won't let me read the article.  Post it here please! 

[mb300sd]

Saw this article linked from the Drudge Report, and thought some of you guys might be interested. Perhaps this attributes to the recent rise in BTC prices. I checked the difficulty chart, and this seems to be some sort of panic buying.

http://www.ft.com/intl/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html#axzz2Ij3jqg21

It won't let me read the article.  Post it here please! 

Google cache

http://webcache.googleusercontent.com/search?q=cache:uD7crzhqFEoJ:www.ft.com/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html+&cd=3&hl=en&ct=clnk&gl=us#axzz2IjIf2j1z

[jimbobway]

There has been some talk of "currency wars" in the media but I don't think they do a good job explaining how the "war" is being implemented.

Countries are purposely trying to devalue their currency to stimulate growth.  If the Yen is cheaper then other countries can buy more Japanese goods with it.  This means workers get to have jobs to make those Sony products or Hondas.  This is good for workers, in general, but for those who honorably saved then their Yen are pretty much screwed because their Yen is now worth less than it was before.   Bitcoin does not allow this to happen!  

This could ripple to other countries so they will lower the value of their currencies.  This would cause competition and world wide growth.  It's like having a world war without the violence.  One problem with this is that competition of price causes everyone to lose since people will have to work harder to earn their money.  If we take it to the extreme we would be working 80 hour weeks...China is already doing it.

[cypherdoc]

and the real bitch about devaluing your currency is who gets the money first?  why, banksters, of course!  at 0%!  do these interest free loans or outright monetizations of bad debt trickle down to the ppl?  why, of course not!

the banksters just pour that money into their stocks and commodities or other forms of hard assets which make it more expensive for the average person to live.

how long can it go on?

[jimbobway]

Yep, banksters reap the rewards of currency devaluation.  Look what happened here:

Chinese workers revolt over 2-minute toilet breaks
http://news.yahoo.com/chinese-workers-revolt-over-2-minute-toilet-breaks-081615186--finance.html

[mufa23]

This link might work: http://www.ft.com/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html

If not, the Google Cache one seems to work.

[jimbobway]

http://www.cnn.com/2013/01/21/business/german-bundesbank-currency-war-risk/

(Financial Times) -- The erosion of central bank independence around the world threatens to unleash a round of competitive exchange rate devaluations, which leading economies have so far avoided during the financial crisis, the president of Germany's Bundesbank warned on Monday.
Jens Weidmann, whose institution's own fierce independence from political influence was the model for the European Central Bank when it was founded, said Stephen King, the chief economist at HSBC, was "perhaps right" in forecasting an end to the era of central bank independence.
"It is already possible to observe alarming infringements, for example in Hungary or in Japan, where the new government is massively involving itself in the affairs of the central bank, is emphatically demanding an even more aggressive monetary policy and is threatening an end to central bank autonomy," Mr Weidmann said in a speech in Frankfurt.
"Whether intended or not, one consequence could be the increased politicisation of the exchange rate," he said, according to a text of his speech provided by the Bundesbank. "Until now the international monetary system got through the crisis without competitive devaluations and I hope very much it stays that way."
Both the Bundesbank and later the ECB were founded on mandates that gave them wide powers and freedom from political interference in return for focusing solely on keeping inflation in check. Some observers argue that the ECB now faces a challenge if other central banks ditch their own inflation targets and act to lower exchange rates against the euro, making exports from the embattled eurozone economies less competitive.
Asked about the trend for central banks to look less at inflation-targeting and more at policy areas that affect exchange rates, Mario Draghi, president of the European Central Bank, said earlier this month that the exchange rate was very important "as far as growth and stability" were concerned but was not a policy target for the ECB.
He also noted that the Group of 20 leading industrial nations had pledged not to undertake competitive currency devaluations as such action undermines economic and financial stability.
Mr Weidmann said the period in the 1980s and 1990s during which central banks around the world had been made independent had heralded a period of "great moderation" during which inflation fell. But the outbreak of the financial crisis and the growing energy and raw materials demand from fast-growing economies had put rising prices back on the agenda and complicated the job of a central bank.
This had led to demands on central banks to support the financial system, stimulate the economy and lower government refinancing costs "or even secure the solvency of a state", he said. "Overloading central banks with tasks and expectations is however certainly not the correct path towards sustainably overcoming the crisis."
The Bundesbank chief, whose concerns about straying from orthodox monetary policy prompted him to vote against and campaign openly against Mr Draghi's unlimited bond-buying plan last year, concluded by quoting approvingly from an interview Mr Draghi gave to the Financial Times in December. Central banks could best defend their independence by narrowly interpreting their mandate, he said.

[myself]

if goods don't cross borders soldiers will -  some intelligent dude

[xxjs]

Yes, world currency war III is certainly possible.

Inflation briefly works, because the loosing part of the public does not understand what is going on. The cost is of course wealth redistribution and distortion of the labour and interest markets, making the population as such poorer than it would otherwise be. If it works on the national scale, it works even better internationally by distorting the import/export trade balances. It is a long way for the public in South Korea or Argentina to connect US or Japanese or Euro inflation (of the money supply) to their own misery.

The reason we have not had currency war continusly, is diverse agreements on the supernational level. A gentlemens agreement, or should I say an agreement between fellow scammers, in the form of unofficial central baker's dinners in Basel, has been effective lately, but seems to be in process of breaking up.

See Currency Wars: The Making of the Next Global Crisis, by James Rickards.

[deadweasel]

Saw this article linked from the Drudge Report, and thought some of you guys might be interested. Perhaps this attributes to the recent rise in BTC prices. I checked the difficulty chart, and this seems to be some sort of panic buying.

http://www.ft.com/intl/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html#axzz2Ij3jqg21

It won't let me read the article.  Post it here please! 

Google cache

http://webcache.googleusercontent.com/search?q=cache:uD7crzhqFEoJ:www.ft.com/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html+&cd=3&hl=en&ct=clnk&gl=us#axzz2IjIf2j1z

Genius, thank you!

[nobbynobbynoob]

This will sound a little radical , but people who work in private sector should really orginanise and demand either Gold or Bitcoins as payment from their employer.

Radical? Sensible, you mean!

Sadly, I doubt we will be seeing too many employers paying out hard-money tax-free salaries any time soon. But you never know, they could secretly be doing it already.

[jwzguy]

Excellent reading on this subject: Currency Wars by James Rickards

[thoughtfan]

This will sound a little radical , but people who work in private sector should really orginanise and demand either Gold or Bitcoins as payment from their employer.

Radical? Sensible, you mean!

Sadly, I doubt we will be seeing too many employers paying out hard-money tax-free salaries any time soon. But you never know, they could secretly be doing it already.

It doesn't necessarily need to be tax free.  As mentioned above the tax deduction can be paid in fiat with the remainder paid in Bitcoin.  Not the long-term solution but it protects the employees from half of the double-whammy income tax and inflation.

[notme]

Yes, world currency war III is certainly possible.

Inflation briefly works, because the loosing part of the public does not understand what is going on. The cost is of course wealth redistribution and distortion of the labour and interest markets, making the population as such poorer than it would otherwise be. If it works on the national scale, it works even better internationally by distorting the import/export trade balances. It is a long way for the public in South Korea or Argentina to connect US or Japanese or Euro inflation (of the money supply) to their own misery.

The reason we have not had currency war continusly, is diverse agreements on the supernational level. A gentlemens agreement, or should I say an agreement between fellow scammers, in the form of unofficial central baker's dinners in Basel, has been effective lately, but seems to be in process of breaking up.

See Currency Wars: The Making of the Next Global Crisis, by James Rickards.

Central baker's... now that's an idea I could support.  Free cake for everybody!

[xxjs]

Yes, world currency war III is certainly possible.

Inflation briefly works, because the loosing part of the public does not understand what is going on. The cost is of course wealth redistribution and distortion of the labour and interest markets, making the population as such poorer than it would otherwise be. If it works on the national scale, it works even better internationally by distorting the import/export trade balances. It is a long way for the public in South Korea or Argentina to connect US or Japanese or Euro inflation (of the money supply) to their own misery.

The reason we have not had currency war continusly, is diverse agreements on the supernational level. A gentlemens agreement, or should I say an agreement between fellow scammers, in the form of unofficial central baker's dinners in Basel, has been effective lately, but seems to be in process of breaking up.

See Currency Wars: The Making of the Next Global Crisis, by James Rickards.

Central baker's... now that's an idea I could support.  Free cake for everybody!

Lol, that should be a cake party, not a dinner!

[fancy_pants]

I, fancy_pants, trolled the financial times currency wars article with the following: 

************
fancy_pants | January 22 2:52am
Bitcoin solves the inflation problem described in this article but with a market cap/float/whatever-you-call-it just under 200 million USD, most professionals probably can't use it for anything other than a personal safe haven currency.
************

I would very much like to sound more professional the next time.  Anyone care to rewrite this?  I think the only good part is "safe haven currency".

[nebulus]

and the real bitch about devaluing your currency is who gets the money first?  why, banksters, of course!  at 0%!  do these interest free loans or outright monetizations of bad debt trickle down to the ppl?  why, of course not!

the banksters just pour that money into their stocks and commodities or other forms of hard assets which make it more expensive for the average person to live.

how long can it go on?

Also there is the advantage of being first to devalue for countries.

I came over an article a month or so ago, where Japan accused USA of breaching an unofficial "don't devalue first treaty".

Good to hear, US is running the show still.

[johnyj]

Independence means power, and with that huge power comes corruption, no one can do anything about the corruptions with bankers. The inflation target is a joke, CPI never count the things the bankers buy, they first feed themselves with printed money and then control the CPI through other means

By this way, a food chain with the central banks stay at the top established, as long as they do not abuse this power, they stay in control. They enslave people, and people trying hard to invent machines to counter this slavery. But the day will come eventually that people realize that bankers are the biggest parasite of the society

[myself]

anyone remember when Zimbabwe stock market was the best performing market on the planet