Goldman Charts the Currency Wars

[bart]

Re: Chimerica---going strong?

...
The fed could buy in any amount, but Peter Bernholz has stated it is high volumes of CB purchases that lead to high/hyper inflation.

And that's the main downside of the Fed buying China's Treasures, although it's FAR from the only cause of high/hyper inflation.

Perspective wise, note that the Fed already owns $1.77 trillion and Japan owns $1.12 trillion while China owns $1.26 trillion (and that's up from $1.17 trillion a year ago).

[vinoveri]

Re: Goldman Charts the Currency Wars

The currency wars crowd finds the idea of close cooperation among central banks far more unnerving than the idea of divisive conflicts among them. It smacks of One World Government. But it is plain for all to see.

One Oligarchic Plutocratic World Government (managed by banksters) if you please.

And given this is the case, coordinated global criminalization, confiscation and/or excessive taxation of the gold is not too far off.

[Southernguy]

Re: Goldman Charts the Currency Wars

The big question is: China begins to sell treasuries fast; what does it do with the dollars it get?
There are couple possibilities: keep the dollar bills, improbable, they woudln´t sell the t´s in the first place. Buy gold? possible, consequences simple. Price of gold goes through the roof probably creating a bout of very big inflation. If the FED were to stop that it should have to rise interest rates. Economy dips fast into negative growth. China becomes very "rich" but it´s international markets shrink abruptly.
Buy land and natural resources everywhere? Already doing it, buy increasingly difficult for political matters as the volume of the grabbing gets bigger.
AFAIK they have already stopped to enlarge their holdings of t´s. Other Itulipers can tell if I am right. If it is correct then that seems to be the farther they shall go for a long time in this matter.

[Polish_Silver]

IMS more chaotic now!

. . . At this moment I believe they are feeling the need more than ever before in their careers...and that the level of global cooperation and coordinated interventions is now arguably unprecedented in scope. . . . they all know they cannot afford a "mistake" with the global economic recovery in such a fragile state.
...

I once read an article arguing that the electric power grid is becoming more susceptible to systemic failures. It is very analogous to the global economic system.

Decades ago, regional utilities were largely autonomous. A generator failure in one region had little effect on the surrounding utilities.

But the utilities found economies of scale by linking their distribution networks. Maintenance in one generator was offset by spare capacity in another. Outages became more rare, and production costs went down.

However, now that the entire nation is linked, we have the possibility of a systemic failure. Each region is dependent on the proper functioning of a complex and far flung network of generators and power transmission systems. If enough of these fail simultaneously, the entire nation would face a brown out.

Think Japan with a Tsunami.

But Electric power is not leveraged. People don't generate 1k Watt to run a 10kW machine for a year and then pay back the 9kW-year with interest. Well, sometimes they do, but the "interest" is so high the practice is never widespread.

The financial system is leveraged. So a default gets magnified as it spreads through the system.
Tiny Greece can threaten to bring down the Euro, and with it the IMS.

If I was Greece, I would exploit that!

Like the terminally ill guy in "Interstate-60" with dynamite strapped to his chest.

[Polish_Silver]

Re: Goldman Charts the Currency Wars

One Oligarchic Plutocratic World Government (managed by banksters) if you please.

And given this is the case, coordinated global criminalization, confiscation and/or excessive taxation of the gold is not too far off.

Vino, would the primary purpose of the anti-gold policy be to prevent people from using an alternative to the IMS?

When Volcker says "gold is the enemy", he seems to mean it that if people start using gold as a savings vehicle, it would cause dollar depreciation via Gresham's law. Apparently Burns was also worried about this.

[don]

Re: Goldman Charts the Currency Wars

In the last few years, as I’ve visited family and friends in Cyprus, I’ve sensed a growing bias against the immigrants. . . xenophobia has grown as the economic situation has worsened.

Iva Radivojevic, a documentary filmmaker based in New York.

[GRG55]

Re: Goldman Charts the Currency Wars

In the last few years, as I’ve visited family and friends in Cyprus, I’ve sensed a growing bias against the immigrants. . . xenophobia has grown as the economic situation has worsened.

Iva Radivojevic, a documentary filmmaker based in New York.

Tribalism is alive and well...and when a society is under stress it reappears in many damaging forms...

Vast Greek war claims against Germany explode like a 'time-bomb'

1:57PM BST 09 Apr 2013

The Greek government is in disarray after the leak of an explosive report drawing up vast reparations claims against Germany, covering both the First and Second World Wars.

Premier Antonis Samaras held a special meeting with the foreign minister Dimitris Avramopoulos and other key officials this morning to limit the diplomatic damage from the 80-page report.

The document – stamped “Aporito”, or secret – was drafted by a panel of experts appointed by the Greek finance ministry and delivered to officials last month.

The alleged claim against Germany reaches a grand total of €162bn, including €108bn for rebuilding the country’s infrastructure after the Nazi occupation from 1941 to 1944. This is 80pc of Greek GDP.

The probe was chaired by Panagiotis Karakousis, director-general of the General Accounting Office at the Finance Ministry, and relied on 190,000 pages of documents scattered through the country’s ministries and archives.

Mr Karakousis told The Daily Telegraph that the report was commissioned by the current leadership, not the previous Pasok government...

...The newspaper said the issue has “detonated like a bomb” at a critical juncture when Greece is under intense pressure from creditors. “The government should publish all the findings and determine its position on this sensitive issue,” it said...

...The report is certain to be viewed by German officials as a form of moral blackmail as tough talks continue over each stage of Greece’s EU-IMF Troika programme...

... It again exposes the breakdown of fundamental trust in the eurozone after three years of depression in the South and mutual recriminations between creditors and debtors. Old demons have been conjured back to life...

[c1ue]

Re: Goldman Charts the Currency Wars

I once read an article arguing that the electric power grid is becoming more susceptible to systemic failures. It is very analogous to the global economic system.

The electrical grid is becoming more susceptible to failures because of higher consumer demand and aging infrastructure, exacerbated by new stresses brought on by feedin from non traditional sources (mostly wind and solar).

The global economic system, on the other hand, I'd argue isn't under stress. It is the global financial system which is under stress, and that is because of over financialization.

There are no issues to my knowledge with trade being affected by payment - unless you're North Korea or Iran - though certainly there have been spikes and dips in consumption due to FIRE related bubbles.

[Slimprofits]

Re: OECD learning from OPEC !

The central banks and legislatures of 43 countries coordinated $4 trillion in stimulus between Q4 2008 and Q1 2009.

83rd BIS Annual Report 2012/2013

23 June 2013

VI. Monetary policy at the crossroads
pg. 68 Central bank total assets Graph VI.2
In trillions of current US dollars As a percentage of GDP

central bank assets 2012.JPG

Since late 2007, central bank total assets worldwide have roughly doubled to about $20 trillion, or just over 30% of global GDP. In the emerging Asian economies, central bank assets correspond to more than 50% of GDP, unchanged since the end of 2007 as GDP in this region also expanded strongly over the period. And in Switzerland, the ratio recently reached 85% of GDP as the Swiss National Bank sharply increased its foreign reserves – to roughly $470 billion by the end of 2012 – in defence of its exchange rate floor against the euro.

[doom&gloom]

Re: OECD learning from OPEC !

A trillion here, a trillion there... after a while it starts to add up to real money you know...