'Analysis - Turning point in the currency war'

[Wallace]

by Mike Dolan LONDON | Wed Mar 21, 2012 1:38pm GMT

"LONDON (Reuters) - A counteroffensive of sorts may be underway this year in what
has seemed like a one-sided "global currency war" as developing economies slow,
western money-printing pauses and the heat comes out of pumped-up emerging
market currencies."
http://uk.reuters.com/article/2012/03/21/uk-investment-currencywar-idUKBRE82K0AC20120321

I think he's a bit off about the 'balance of trade'
if the world economy is going to improve, so too will China's exports, no hard landing

pdf: graphs: 'Currency Performance in 2012' - 24 currencies, 'China Trade Balance'

see also PPP: http://fx.sauder.ubc.ca/PPP.html

 

[AKUMATOTENSHI]

I used to work the RUBUSD trade and after 2 years of watching the global currencies they all seem to a slow glide down to parity. Politcians and policy makers create ireversable damage to thier repsective social systems. The end result is a devaluation in the nation states value. The countries try the bond market for some easing and pass the debt to another nation state but the end result is the same. Globalization will correct this issue where one world currency is the new norm. China even though the other nation states are complaining were wise to peg their currency.
There is acctualy little need for a nation sate currency in the new digital world. Goods services can be aquired from anywhere on the planet to anywhere on the planet. An inefficiency is created when currency has to be converted. The market as a whole will drive this out so that goods and services can be expidisiously consumed.
The global currency game will come to an end sooner than later.

 

[oldtime]

Quote from AKUMATOTENSHI:

I used to work the RUBUSD trade and after 2 years of watching the global currencies they all seem to a slow glide down to parity. Politcians and policy makers create ireversable damage to thier repsective social systems. The end result is a devaluation in the nation states value. The countries try the bond market for some easing and pass the debt to another nation state but the end result is the same. Globalization will correct this issue where one world currency is the new norm. China even though the other nation states are complaining were wise to peg their currency.
There is acctualy little need for a nation sate currency in the new digital world. Goods services can be aquired from anywhere on the planet to anywhere on the planet. An inefficiency is created when currency has to be converted. The market as a whole will drive this out so that goods and services can be expidisiously consumed.
The global currency game will come to an end sooner than later.

maybe so, but they've been talking about a one world currenciy for decades. SDR's hold some promisie, but until that time at 40 to 1 these are the glory days for forex trading. Everybody wants their currency to be lower than somebody elses for the exporters, but at the same time they want it to be strong for the people. It's gambling at it's finest.

 

[gtor514]

The article concludes that the dollar will strengthen as a result of higher interest rates and fall in treasuries coupled with economic growth. However, since the dramatic move on 3/14 the dollar has weakened and has recovered somewhat since the 10year bottomed on 3/21.

Is higher yields really going to be a tailwind to the US economy? Also of note is that Gilts and Bunds also fell but equities didn't really rally. I personally think the positive economic outlook for the US is a bunch of smoke and mirrors but I'm not sure about the bond market.

My question is if there is a global shift out of gov't bonds and yields rise, who will be hurt or helped the most?

 

[ocean5]

Quote from AKUMATOTENSHI:

I used to work the RUBUSD trade and after 2 years of watching the global currencies they all seem to a slow glide down to parity. Politcians and policy makers create ireversable damage to thier repsective social systems. The end result is a devaluation in the nation states value. The countries try the bond market for some easing and pass the debt to another nation state but the end result is the same. Globalization will correct this issue where one world currency is the new norm. China even though the other nation states are complaining were wise to peg their currency.
There is acctualy little need for a nation sate currency in the new digital world. Goods services can be aquired from anywhere on the planet to anywhere on the planet. An inefficiency is created when currency has to be converted. The market as a whole will drive this out so that goods and services can be expidisiously consumed.
The global currency game will come to an end sooner than later.

But what about gold?How do you know it goes up to $2000?Do you monitor it,or is it just an opinion?

 

[oldtime]

Quote from ocean5:

But what about gold?How do you know it goes up to $2000?Do you monitor it,or is it just an opinion?

$2500 more like it, but what does that mean? your oz of gold is now worth 2500 pieces of paper

 

[ocean5]

Quote from oldtime:

$2500 more like it, but what does that mean? your oz of gold is now worth 2500 pieces of paper

It`s ok if you can buy a bit freedom with this paper or help someone.Try to live on $50 a week,might help you.

 

[AKUMATOTENSHI]

Quote from ocean5:

But what about gold?How do you know it goes up to $2000?Do you monitor it,or is it just an opinion?

The metals in both the precious and base metals are both watched. Physical commodites vs. Conceptual Fiat Commodities are are in competion with each other in my trades. Which will have the most gain in the process tree. Gold has been winning for the last several thousand years against the worlds nation states. Many goverments have tried to break the wealthy from the asset protection model which is within a commodity backed metric system. Here in the US petro dollars are the supposed system base.
Fiat currency is a confidence game nation state play. The "note" is a representative of some "thing" that the nation state claims ownership or rights to. That perception is measured against other nation states or global commodities and value is either gained or loss.
An outright currency war would only expidite the move to a one world currency the winning nation sate would have their fiat measured against some physical commodity. It would be a phyric victory
I am waiting for a unified African currency to enter the scene which would change the "game" in a profitable way. It would keep the game more interesting for a couple of years before we reach the convergence point.