Commodity Trade Mantra

Posts Tagged ‘Currency Devaluation’

Currency Devaluation is no Accident, Save in Real Money: Gold and Silver

People should be encouraged to save in real money. Devaluation of “fiat money” is no accident. While the Federal Reserve Note “dollar” has lost more than 97% of its purchasing power since the Federal Reserve System was created in 1913, gold and silver is a much better store of value, having risen 60 and 20-fold, respectively, in their dollar-denominated price.

Currency Manipulation by the United States Is Alive and Well

Although further currency manipulation is far from ideal, the US is in no place to criticize Japan for it. Historically, the US has been the world’s leading cheerleader for currency manipulation. If the United States government wants to continue dishing out anti-currency manipulation rhetoric, it best explain why it’s had its own hands in the foreign exchange market.

Some Game-Changers for Gold Prices on a Long-Term Outlook

Don’t for a second believe these are the only factors making a strong case for higher gold prices ahead. There are many more that suggest the same. Looking at all that’s happening around the world, $5,000 gold prices seems like a real possibility. I don’t expect the gold price to hit $5,000 right away. It will take time – Nevertheless, gold bears beware!

Copper Prices Decline To Levels Below Cost of Production

There are various estimates for what the Marginal Cost of getting Copper out of the ground is before supply is taken offline completely. But it is reasonable to assume that Copper is currently being priced well below the long term Production Cost of Processing the Industrial Metal. The $2 Copper could well be setting up for an ample short covering rally before 2015 ends.

Beijing & the West Together Manipulate the Global Currency War

So why is the world of currency diplomacy now playing along with the nonsense of the IMF examining whether the Chinese yuan has met the criterion to become a reserve currency? Why is the Western world playing along with the official Chinese currency charade? Why do Western governments pursue non-market trade diplomacy so enthusiastically with Beijing?

Why the Fed Would be Insane to Raise Rates: The Rising U.S. Dollar

What happens when the Fed makes the US Dollar more attractive to global capital? Capital flows even faster out of emerging economies and China. The tidal flow of capital out of emerging markets and China threatens to surge into a veritable tsunami should the Fed raise rates. What happens as capital flees emerging markets and China? Lots of bad things.

China: QE, Printing of Cheap Money, Currency Devaluation and Gold

To the extent that it weakens its own currency, China exports deflation to the U.S. and can help the dollar’s strength. Lower inflation and a stronger dollar reduce the incentive or rationale for any imminent Fed rate hike. So yes, you can almost say this is China’s silent protest against the widely anticipated September hike.

After The Chinese Currency Devaluation, Who's Next?

On a broader level, the currency devaluation signals PBOC’s eagerness to join the global currency wars. With the competitive currency devaluation by various central banks gaining momentum but global trade slowing, the latest CNY devaluation could be seen as likely to force other central banks to consider similar measures before long.

Currency Devaluation: The Crushing Vice of Price

When stagnation grabs exporting nations by the throat, the universal solution offered is devalue your currency to boost exports. Currency Devaluation is a bonanza for exporters’ bottom lines, but has a negative consequence: The cost of imports skyrockets. When imports are essential, the benefits of devaluation may be considerably less than the pain caused by rising import costs.

Conspiracy Theory: A Greek Default Is Precisely What The ECB Wants

From an economic perspective, Greece shows “internal devaluation,” – which is a very polite way of saying plunging wages, labor costs, and generally benefits, including pensions. Goldman essentially says that it is in the ECB’s & Europe’s, best interest to have a Greek default – and with limited contagion at that – one which finally does impact the EUR lower.

Will China's Currency Peg Be the Next to Fall?

A pegged currency rises & falls against other currencies along with the underlying currency. As the dollar weakened from 2010 to mid-2014, China’s Renminbi weakened along with it. Now that the USD has gained 16% in less than a year, that’s dragging the RMB / Yuan higher with it, making China’s goods less competitive outside the US.

Rising Gold Prices Warning Sign Of Future Monetary And Currency Turmoil

Since its recent lows in Nov 2014, gold has risen by up to 13% against USD, 30% against euro, 18% against pound & 32% against the yen. Rising gold price is an early warning of future monetary & currency turmoil, as major central banks continue to print enormous amounts of money, an increase in the demand for physical gold can be expected.

Don’t Expect India’s Gold Imports to Surge on Tariff Cuts

The Indian government is reversing its efforts to curtail gold imports & gold importers expect a drop in import tariffs to be announced in the upcoming federal budget. But will there be a big surge of gold imports as a result? Probably not. Gold imports will continue to be strong as are now & the cuts may not make a noticeable difference.

Debt, Default, and Taxes (DDT) Are Poison

National Debt has been increasing faster than both population growth and hourly wages. The only solution is default, either now or later, either by refusing to pay the debt and/or by inflating the dollar so its value decreases to nearly nothing. With so much paper in the system it is easy to see why the Fed publicly denigrates gold.

Price of Gold Will Rise - Greenspan

It’s not because former Fed Chair Alan Greenspan said he thinks the price of gold will rise – I don’t need his investment advice; it’s that he shed light on how the Fed works in ways no other former Fed Chair has ever dared to articulate. All investors should pay attention to this.

Europe: Stagnation, Default, Or Devaluation

When a country accumulates too much debt and begins to find the roll-overs a growing challenge, it really has just two options: the first is a total or partial default; the second is a large currency devaluation. The second choice begs the question ‘Who prints the currency in which the debt is labeled?’

Silver, Gold and Living By The Sword

If you live by the “sword” of debt based paper currencies, you can reasonably expect detrimental consequences as the purchasing power & confidence in those paper currencies gradually dies. However, if you live based on the continuing value of gold and silver, you should experience a safer and more secure financial future.

14 Reasons the Dollar is Doomed, but the Devout Believe its Invincible

Cultism surrounding the US economy & the US dollar is mind boggling & by cultism I mean a blind faith in fiat currency mechanism that goes beyond all logic. Despite the childish boasting’s of the dollar devout, there is an extraordinarily possibility that its life will be snuffed out in the near term.

The Final Swindle Of Private American Wealth Has Begun

There’s no doubt the American economy is headed for total & catastrophic collapse – the only question is when the final trigger event would occur. American populace is being conditioned through economic fear to accept the institutionalization of global financial control & the loss of sovereignty.

More Leading Economists Call For Capital Controls

Historically, capital controls have been used in ‘desperate times’ – Too much of debt, deficit spending, trade deficit or wars. The simple idea behind capital controls: Create barriers to restrict the free flow of capital. And if you’re on the receiving end, capital controls can be enormously destructive.

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