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Post by Swampy on Feb 17, 2013 20:06:13 GMT -5
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Post by Sir John on Feb 17, 2013 20:20:35 GMT -5
Swampy,
This is a 'chicken and the egg' situation now. Most of the leading nations have no real choice. They MUST print as their Central Banks are the only real buyers that take up all those new Bonds for sale.
From there it is a very slippery downward (inflation) slope.
SJ
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Post by Swampy on Feb 18, 2013 11:24:54 GMT -5
You're right, SJ. France is grumbling about Japan's devaluation, and, pretty soon, everyone will be doing the same. Thing is, devaluation is a zero-sum game, because one country's devaluation is another country's appreciation, so, as they start printing ... |
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Post by mcnoch on Feb 18, 2013 11:30:43 GMT -5
No, they cannot, but a bar of silver will track the inflation rate (at least) just like an ounce of gold went to 100 Trillion Marks in Germany in 1923. German 100 or 1000 or 10,000 or 100,000 Mark notes were used to fire up the water heater, or wallpaper the house. mcnoch will confirm his (great?) grandfather's memories. While it is often told that the money was used to make fire, clean windows or stuff holes in walls, this is not true, at least in general. As the German banks were unable to print so much new money every week, they simpoly declared smaller paper money value as "invalid" and you had to turn in the paper money. This money then got a stamp with the new value (normally a 000 was added) and was returned to the cycle. To keep the devalutation at least psychologically a bit more under control the German Reichsbank introduced new ranges, which are unique to Germany. US : million - billion - trillion Ger : Million - Milliarde - Billion - Billiarde - Trillion - Trilliarde |
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Post by mcnoch on Feb 18, 2013 11:33:02 GMT -5
Massiv devaluation of currencies lead to nothing but problems in the smaller countries.
If Japan would artificially decrease the value of the Yen bis 30 to 40% and the other would follow there is nothing to gain as the G-20 deal mainly with each other.
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Post by Swampy on Feb 18, 2013 11:39:11 GMT -5
Massiv devaluation of currencies lead to nothing but problems in the smaller countries. If Japan would artificially decrease the value of the Yen bis 30 to 40% and the other would follow there is nothing to gain as the G-20 deal mainly with each other. Exactly! Devaluation is just window dressing, because Japan needs brutal reforms, especially in its agricultural sector and in the way its companies are not allowed to lay off workers and shut down unproductive divisions. |
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Post by mcnoch on Apr 7, 2013 9:28:25 GMT -5
Japan is playing again with the fire and is trying to increase their exports by devaluating their currency against other currencies. For that the Japanese FED will double until 2014 the amount of money by inserting per year 1.4 trillion US$. The head of the German Federal Reserve Bank criticized Japan for that. The Japanese problems are not due to a too small liquidity, but due to high state-debts and a quickly ageing population. Japan must prepare plans to fold some of their bankrupt banks, like it was done in Cyprus, but in a better planned fashion.
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Post by Swampy on Apr 7, 2013 9:30:58 GMT -5
It isn't going to work - they need brutal surgery on their economy, which means liberalizing the farm sector and allowing their bigger companies to fail, so that better ones can rise up.
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Post by Swampy on Apr 19, 2013 6:35:09 GMT -5
The International Monetary Fund is concerned about a currency war, as every country prints money to make its exports cheaper. This will cause ruinous inflation and create the same beggar-thy-neighbor policies that helped create the Great Depression. The IMF is also correct in saying growth should be a priority but stops short of saying Europe and Japan need brutal surgery, which, in the end, is the only way out.
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Post by Sir John on Apr 19, 2013 23:59:50 GMT -5
It has already started!
Just ask Japan!
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Post by mcnoch on Apr 20, 2013 0:29:43 GMT -5
On the annual meeting of the international Monetary Fund and world bank the focus is on Japan and the USA, who are both flooding the market with new money. The aggressive policy of the BoJ already caused a drop in the exchange-rate of the Yen to US$ of 25 % in the last months.
The local ecconomies can't absorb the hugh amounts of new money. Creating growth by cheap money isn't working this time, only causing some investment bubbles which are causing a wrong impression of economic recovery and growth. So all the cheap money has to go somewhere and many of the 2nd world nations like China, Brazil and South Korea are highly worried that the money might flood their markets with so far good growth rates adn cause chaos and fast rising prices and climbing exchange rates there. Europe is mixed, the North doesn't want this, the South would favor the cure by fresh money instead reforms.
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Post by mcnoch on Apr 20, 2013 6:31:29 GMT -5
Seems the annual meeting yesterday was the failure everyone expected. Germany and the USA on the different poles, the rest somewhere between. The USA recognize that the Euro-zone has reduced its debt by 50% over the last three years, but now is in a recession, which they don't want for the USA anymore. Germany thinks 3 % GDP growth is nice, but that 8% of the GDP in new debts is a too high price for that and that this tool fails in the current situation. The rest is for reducing the debt, but over a longer period. No solution in sight and the G-20 will not solve this too. China, Brazil and the other were sitting only on the sideline but are relieved that Germany didn't gave in to the mounting US pressure to start create some growth numbers by printing money.
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