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Tag Archives: currency devaluation
Inflation v Deflation–State Finances
INFLATION V DEFLATION – STATE FINANCES There is a general belief, and that is all it is, that state finances fare better in an inflationary environment than a deflationary one. This perception arises from the transfer of wealth from lenders to the state through a devaluation of the currency, which occurs with monetary inflation, compared […]
Prepare for a Chinese Maxi-devaluation
Prepare for a Chinese Maxi-devaluation China is a relatively open economy; therefore it is subject to the impossible trinity. China has also been attempting to do the impossible in recent years with predictable results. Beginning in 2008 China pegged its exchange rate to the U.S. dollar. China also had an open capital account to allow […]
China Battles “Impossible Trinity”
China Battles “Impossible Trinity” Just because something is inevitable does not mean it cannot be postponed. The popular name for this is “kicking the can down the road,” which is a perfectly good description. I prefer more technical terms such as dynamic systems in “subcritical” and “supercritical” state space, but it amounts to the same […]
Gold Reset To $10,000/oz Coming “By January 1, 2018” – Rickards
Gold Reset To $10,000/oz Coming “By January 1, 2018” – Rickards – Trump could be planning a radical “reboot” of the U.S. dollar – Currency reboot will see leading nations devalue their currencies against gold – New gold price would be nearly 8 times higher at $10,000/oz – Price based on mass exit of foreign governments […]
Hyperinflation Defined, Explained, and Proven: Part II – Jeff Nielson
Hyperinflation Defined, Explained, and Proven: Part II – Jeff Nielson Part I began the somewhat ambitious mission described in the title: providing readers with the true definition of the term “hyperinflation”, in both economic and mathematical terms. This was done through first defining the term “inflation” itself. It was then explained how the dynamics of inflation/hyperinflation […]
Presenting The Complete Global Currency Swirlogram
Presenting The Complete Global Currency Swirlogram In case you missed it, DM central banks are locked in a truly epic FX deathmatch. Sluggish growth and trade and the attendant global deflationary supply glut have left the world stuck in a nauseating, perpetual hangover from the financial crisis. Subpar inflation and disappointing growth have become the […]
Recipe for Collapse: Rising Military and Social Welfare Spending
Recipe for Collapse: Rising Military and Social Welfare Spending Leaders faced with unrest, rising demands and dwindling coffers always debauch their currency as the politically expedient “solution.” Whatever you think of former Fed chair Alan Greenspan, he is one of the few public voices identifying runaway entitlement costs as a structural threat to the economy […]
Canada Rebels against the Destruction of the Loonie
Canada Rebels against the Destruction of the Loonie The fear of “currency instability.” “Without precedent” — that’s what National Bank of Canada’s chief economist Stéfane Marion called the wholesale destruction of the loonie. The Canadian dollar is in a tailspin. Rarely has it tumbled so far so fast, and against so many currencies. The steepness of […]
Nations Scramble to Compete in ‘Currency War’ as China’s Yuan Falls to Five-Year Low
Nations Scramble to Compete in ‘Currency War’ as China’s Yuan Falls to Five-Year Low Allan Ajifo / (CC BY 2.0) China, Europe and Japan are driving down the value of their currencies in order to make their exports more attractive on the global market, leaving millions of workers in associated industries “protected or vulnerable, depending on which […]
The Fallacy that Weakening Your Currency Generates Prosperity
The Fallacy that Weakening Your Currency Generates Prosperity Those demanding that the purchasing power of the currency be devalued are impoverishing everyone who holds the currency. Of the many economic policies that are accepted as true yet are absolute nonsense, perhaps none is more achingly nonsensical than the notion that weakening a nation’s currency will […]
China and the dollar
China and the dollar With the benefit of hindsight, the two-day devaluation of the yuan in mid-August might have been a masterstroke of strategy. China executed a financial move that appeared to undermine its own position but instead created trouble for the US; how much is still to be played out. So was the devaluation […]
Brazilian Nightmare Worsens On Bad Budget Data, Record Low Confidence, Horrific Government Approval Ratings
Brazilian Nightmare Worsens On Bad Budget Data, Record Low Confidence, Horrific Government Approval Ratings Last month, in “‘No Recovery For You!’ Brazil Officially Enters Recession, Goldman Calls Numbers ‘Disquieting’”, we outlined Brazil’s July fiscal performance and came away believing that the country had little chance of hitting its primary fiscal surplus targets. Here’s what we […]
India “Surprises” 51 Out Of 52 “Experts”, Slashes Rates More Than Expected As Easing Bonanza Continues
India “Surprises” 51 Out Of 52 “Experts”, Slashes Rates More Than Expected As Easing Bonanza Continues Late last month, we asked how long it would be before the RBI hit back in the wake of China’s yuan deval. The Indian government’s chief economic advisor Arvind Subramanian had just told ET Now television that India may need to […]
Don’t Forget China’s “Other” Spinning Plate: Trillions In Hidden Bad Debt
Don’t Forget China’s “Other” Spinning Plate: Trillions In Hidden Bad Debt To be sure, there’s every reason to devote nearly incessant media coverage to China’s bursting stock market bubble and currency devaluation. The collapse of the margin fueled equity mania is truly a sight to behold and it’s made all the more entertaining (and tragic) […]
Saudi Arabia Faces Another “Very Scary Moment” As Economy, FX Regime Face Crude Reality
Saudi Arabia Faces Another “Very Scary Moment” As Economy, FX Regime Face Crude Reality “They are working for their market share, not for the price,” Kazakh Prime Minister Karim Massimov told Bloomberg on Saturday, during the same interview in which he predicted that sooner or later, dollar pegs in Saudi Arabia and the UAE would […]
