Cyprus-Forum.com

[insan]

The dollar may fall below 75 yen next year as it becomes the world’s “weakest currency” due to the Federal Reserve’s monetary-easing program, according to JPMorgan & Chase Co.

The U.S. central bank, along with those in Japan and Europe, will keep interest rates at record lows in 2011 as they seek to boost economic growth, said Tohru Sasaki, head of Japanese rates and foreign-exchange research at the second-largest U.S. bank by assets. U.S. policy makers may take additional easing steps following the $600 billion bond-purchase program announced this month depending on inflation and the labor market, he said.

“The U.S. has the world’s largest current-account deficit but keeps interest rates at virtually zero,” Sasaki said at a forum in Tokyo yesterday. “The dollar can’t avoid the status as the weakest currency.”

The Fed said on Nov. 3 it will buy $75 billion of Treasuries a month through June to cap borrowing costs. The central bank has kept its benchmark rate in a range of zero to 0.25 percent since December 2008. The Bank of Japan on Oct. 5 cut its key rate to a range of zero to 0.1 percent and set up a 5 trillion yen ($59.9 billion) asset-purchase fund.

http://blacklistednews.com/Dollar-to-Be ... 3/Y/M.html

[Get Real!]

So what's stopping the US from introducing a multiplier to get the world's "strongest" currency?

Can you think of one other country Insan, that did this (x1,000,000) to save herself from the embarrassment of having the world’s most worthless currency?

[Get Real!]

Sorry, read "divisor" instead of "multiplier".

[insan]

So what's stopping the US from introducing a multiplier to get the world's "strongest" currency?

Can you think of one other country Insan, that did this (x1,000,000) to save herself from the embarrassment of having the world’s most worthless currency?

I always cringe when I read references to 'war' in the sports pages. It was a 'war on the pitch', a 'war on the court'.

Now we have 'a war' in the financial pages of the newspapers and you can thank Brazil for that. By most accounts, it was recently the Brazilian finance ministry that first coined 'currency war' in relation to the monetary face-off between China and the US taking place at the G20 in Seoul. The 'currency war' term has stuck.

Now Brazil is going to try to act as unofficial mediator between the two superpowers.

"It’s better to dialogue than to fight," Lula da Silva, Brazil’s president, implored to world leaders shortly after arriving in South Korea.

But talking can probably go only so far in this conflict, which boils down to this: the US has long claimed that by almost all measures China’s currency is purposefully grossly undervalued.

With an undervalued currency, they argue, China is distorting global financial flows in its favor.

On the flipside, China, and other emerging countries such as Brazil are furious at the US Federal Reserve’s decision to pump $600bn into the American economy last week claiming the move would 'flood' developing countries with cheap, speculative dollars and thus weaken local economies.

"Those US dollars end up going abroad like a tsunami and for these developing countries it's very difficult to contain that pressure," said Mauricio Cardenas of the Brookings Institute.

"So the dollars are intended to reactivate the economy in the US but end up overseas and that, of course, is a problem for these developing countries where these dollars cause abjection of local currencies."

razil as mediator?

While Brazil might try to play mediator, if backed into a corner and forced to choose sides between either Washington or Beijing, likely the Brazilians will side with the Chinese.

Why? Because while Washington was ignoring Brazil the past decade, rightly or wrongly consumed with all things 'terror' related, the Chinese were quietly surveying the global landscape and laying the groundwork for a long term friendship with South America’s largest economy right in America’s backyard.

And it's paid off: It was just last year that China surpassed the United States as Brazil's largest trading partner, signaling a major shift in the global economic order.

Since then, Brazil has been reluctant to overtly criticise the Chinese. If you were a shop owner would you remind your best customer every time she came in to buy something that they have an ugly hair style?

But that doesn’t excuse Brazilians silence, according to Cardenas.

"I hope in South Korea PresidentLula takes a more balanced approach and mentions a lot the problems of China," Cardenas said.

"Brazil has been reluctant to start a confrontation with China because everyone knows China is Brazil’s number one client now. But that should be no excuse for saying the right things. And the right things both for the US and China should be to change, and reach an agreement that is beneficial for the rest of the world."

http://english.aljazeera.net/focus/2010 ... 77349.html

[Mr. T]

So what's stopping the US from introducing a multiplier to get the world's "strongest" currency?

Can you think of one other country Insan, that did this (x1,000,000) to save herself from the embarrassment of having the world’s most worthless currency?

Sorry to see once again that you are showing your lack of knowledge of economics.

Removing zeros is far from a rarity and is often done to combat inflation. If you would care to carry out some reading you will find that in the case of Turkey in was little more than a paper exercise.

If, however you want examples of countries with real problems how about Zimbabwe with Z$10 billion converted to Z$1?

In Germany in 1923 a loaf of bread cost 200 billion marks and a wheelbarrow full of notes was needed for the tiniest of purchases. 1,000,000,000,000 marks were subsequently converted to 1 mark.

After the war Germany devalued its currency on more than one occasion. Look where it is now.

Turkey with its population and geographical position has the potential to be a major economic power too. Just hope it is on your side.

[Gasman]

Wilson devalued the pound sterling in the 60s didn't he?

France devalued the franc (70s?)

Switzerland quite recently?

It's not unheard of. And often makes sense. But impossible for individual countries to do if they are in the EU and adopted the euro isn't it?

Opinion at the time was that Greece would have been better off if they'd kept their currency, devalued and increased exports. They couldn't do that.

I was really surprised that Cyprus so readily and quickly adopted the Euro.

[Get Real!]

So what's stopping the US from introducing a multiplier to get the world's "strongest" currency?

Can you think of one other country Insan, that did this (x1,000,000) to save herself from the embarrassment of having the world’s most worthless currency?

Sorry to see once again that you are showing your lack of knowledge of economics.

Removing zeros is far from a rarity and is often done to combat inflation. If you would care to carry out some reading you will find that in the case of Turkey in was little more than a paper exercise.

If, however you want examples of countries with real problems how about Zimbabwe with Z$10 billion converted to Z$1?

In Germany in 1923 a loaf of bread cost 200 billion marks and a wheelbarrow full of notes was needed for the tiniest of purchases. 1,000,000,000,000 marks were subsequently converted to 1 mark.

After the war Germany devalued its currency on more than one occasion. Look where it is now.

Turkey with its population and geographical position has the potential to be a major economic power too. Just hope it is on your side.

Why do you feel embarrassed about Turkey's embarrassment that you had to post this embarrassing load of bollocks about war-torn currencies?

[dinos]

The dollar may fall below 75 yen next year as it becomes the world’s “weakest currency” due to the Federal Reserve’s monetary-easing program, according to JPMorgan & Chase Co.

The U.S. central bank, along with those in Japan and Europe, will keep interest rates at record lows in 2011 as they seek to boost economic growth, said Tohru Sasaki, head of Japanese rates and foreign-exchange research at the second-largest U.S. bank by assets. U.S. policy makers may take additional easing steps following the $600 billion bond-purchase program announced this month depending on inflation and the labor market, he said.

“The U.S. has the world’s largest current-account deficit but keeps interest rates at virtually zero,” Sasaki said at a forum in Tokyo yesterday. “The dollar can’t avoid the status as the weakest currency.”

The Fed said on Nov. 3 it will buy $75 billion of Treasuries a month through June to cap borrowing costs. The central bank has kept its benchmark rate in a range of zero to 0.25 percent since December 2008. The Bank of Japan on Oct. 5 cut its key rate to a range of zero to 0.1 percent and set up a 5 trillion yen ($59.9 billion) asset-purchase fund.

http://blacklistednews.com/Dollar-to-Be ... 3/Y/M.html

This is more a political statement than a valid economic argument. Why is QE any different than debasing your currency at the M3 level (i.e. via the credit markets)?

And where were these retards when US M3 money supply was rising 17% a year? NB that overall US money supply is actually contracting right now - hardly a valid basis for the concern voiced by this source. I do hope that nobody is taking advice from this Sasaki guy...

Anyway, since the US no longer officially reports M3, here's a link to see where it stands with current (non-government) calcs.

http://www.shadowstats.com/alternate_da ... ply-charts