Currency Wars

2013 Bitcoin Mid-Year Review and Outlook

"The past six months may one day prove to be among the most important in bitcoin’s history. As global events sparked increasing need for frictionless wealth transfers, bitcoin’s popularity ballooned and ignited a conversation that will likely continue to flourish in the years to come. Growth in bitcoin’s value was outpaced only by the incredible interest from entrepreneurs, investors and the press. In this 27-page report we cover the major events from the first half of 2013 and what to look out for in the months ahead." Continue reading →

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China’s Central Bank Subsidizes the Federal Deficit

"The Chinese central bank creates money out of nothing, just as the Federal Reserve does. Then it takes this newly counterfeited money and buys U.S. government debt, just as the Federal Reserve does. It bought $25 billion of this debt last month. The Federal Reserve bought $45 billion. So, when it comes to currency-rigging, which central bank is the greater culprit? The two economies, China’s and America’s, are addicted to the drug of fiat money. The first central bank to quit counterfeiting — the first one to 'taper' — starts the international recession. The first one to stop inflating permanently will turn the recession into a depression. Which will it be?" Continue reading →

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Google no longer able to pay Android developers in Argentina, pulling apps on July 27th

"Developers in Argentina have begun receiving letters from Google informing them that 'Google Play will no longer be able to accept payments on behalf of developers registered in Argentina starting June 27, 2013.' The change applies to both paid apps and apps that use in-app purchases. The move appears to be related to new, restrictive regulations the Argentine government has imposed on currency exchanges, which The Telegraph detailed this past September. Twitter has quite a few developers complaining about the changes, but it's not clear how many people will be affected." Continue reading →

Continue ReadingGoogle no longer able to pay Android developers in Argentina, pulling apps on July 27th

As the market panic demonstrates, central banks are stuck on a treadmill of money printing

"Last night's panic in Tokyo, where the Nikkei dropped a stomach churning 7 per cent, demonstrates just how difficult it's going to be for the world's central banks to exit their loose money policies. It's not even as if Ben Bernanke, chairman of the Fed, said he was planning to exit; in fact, initially he said the reverse in testimony to Congress. What the subsequent violent gyrations in markets indicate is that any hint of applying the brakes risks generating a fresh financial crisis, which in turn would render the economic recovery still born. Both financial markets and the real economy have become addicted to 'quantitative easing', such that they can't do without it." Continue reading →

Continue ReadingAs the market panic demonstrates, central banks are stuck on a treadmill of money printing

The Bank of Japan must crush all resistance, and will do so

"Kudos to Kyle Bass at Hayman Advisers for warning that the Bank of Japan would lose control of its ¥70 trillion bond buying blitz. The spike in the 10-year yield to 1pc on Thursday was certainly shocking to behold. His point is that the BoJ faces a 'rational investor paradox'. The authorities are trying to drive up the inflation to 2pc and therefore to devalue Japanese government bonds (JGBs), so why on earth would you want to own them? He says the scramble to sell has 'overwhelmed' buying by the BoJ. Governor Kuroda will now have double down with a huge increase in the scale of QE." Continue reading →

Continue ReadingThe Bank of Japan must crush all resistance, and will do so

Peter Schiff: The Biggest Loser Wins

"Never in the course of history has a country's economy failed because its currency was too strong. It's a pathology that simply does not exist. On the other hand, the list of those ruined by weak currencies is extensive. The view that a weak currency is desirable is so absurd that it could only have been devised to serve the political agenda of those engineering the descent. A currency war is different from any other kind of conventional war in that the object is to kill oneself. The nation that succeeds in inflicting the most damage on its own citizens wins the war. The only real way to win is not to play." Continue reading →

Continue ReadingPeter Schiff: The Biggest Loser Wins

Argentina: Dollar price at 10.45 Pesos over two times the ‘official’ price

"The blue dollar jumped past the key psychological barrier of 10 Pesos on Tuesday in thin t rade, reflecting persistent demand for greenbacks amid tough currency controls. Meanwhile, the official rate remained unchanged at exchange offices in Buenos Aires at Pesos 5.16 (buying price) and Pesos 5.22 (selling price), with the gap between the two markets over 100%. In a context of high inflation, negative interest rates or other options to defend the value of the Argentine currency, Argentines are increasingly taking refuge in the US dollar. To this must be added an overall feeling of distrust and uncertainty which can have a greater impact that what stats can present." Continue reading →

Continue ReadingArgentina: Dollar price at 10.45 Pesos over two times the ‘official’ price

Bank Of Korea Delivers The Latest Surprise Interest Rate Cut This Week

"The Bank of Korea just unexpectedly cut its key interest rate to 2.5% from 2.75%. This is pretty remarkable, considering that market economists have already been surprised by two other central bank rate cuts this week. On Monday, the Reserve Bank of Australia unexpectedly lowered its key interest rate to 2.75% from 3%. Earlier Wednesday, the National Bank of Poland unexpectedly cut its key interest rate to 3% from 3.25%. These three surprise rate cuts follow the ECB and the Reserve Bank of India last week. Global growth slowdown, 'currency wars,' etc. – call it whatever you'd like, but it seems to really be getting going now." Continue reading →

Continue ReadingBank Of Korea Delivers The Latest Surprise Interest Rate Cut This Week

China Opens New Front in Currency War as Yuan Speculation Distorts Export Data

"The move came as April exports blew past expectations, which appeared on the surface to indicate that both China's economy and global demand were on the mend. But economists were quick to suspect the figures were artificially inflated by investors who were disguising speculative bets on the yuan currency as trade payments. Faced with the risk that such inflows could cause the yuan to appreciate so quickly that it destabilizes exports and the broader economy, the People's Bank of China (PBOC) has begun intervening heavily in the domestic currency market this year, buying up dollars and selling yuan." Continue reading →

Continue ReadingChina Opens New Front in Currency War as Yuan Speculation Distorts Export Data

Australian Central Bank Cuts Key Rate to Record-Low 2.75%

"The Reserve Bank of Australia cut its benchmark interest rate to a record low, driving down a currency that has damaged manufacturing and boosted unemployment. Governor Glenn Stevens reduced the overnight cash-rate target by a quarter percentage point to 2.75 percent, saying in a statement that the Aussie’s record strength 'is unusual given the decline in export prices and interest rates.' He joins global counterparts in embracing record-low rates in an economy where inflation is contained, mining spending is predicted to crest, and credit growth remains subdued." Continue reading →

Continue ReadingAustralian Central Bank Cuts Key Rate to Record-Low 2.75%