GoldCore Insight – Currency Wars: Bye Bye Petrodollar – Buy, Buy Gold !
- GoldCore Insight – Currency Wars: Bye Bye Petrodollar – Buy, Buy Gold!
by http://www.goldcore.com/
Currency wars are probably one of the greatest risks posed to the wealth of nations today.
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In September 2010, Guido Mantega, Brazil’s finance minister, warned that an “international currency war” had broken out, as governments around the globe peg their currencies and devalue their currencies against each other. His comments were echoed by senior Russian and Chinese officials.
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The G20 said last week that there would be no currency wars and some central bankers such as the ECB’s Mario Draghi have recently dismissed talk of “currency wars” as excessive.
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Sir Humphrey, the wily civil servant in ‘Yes Prime Minister’, always stressed how important it was “to never believe anything until it is officially denied.”
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Competitive currency devaluations are in effect a continuation of currency debasement. Debasement is simply the devaluing of one’s currency or money. In ancient and medieval history it used to be done through the clipping of gold and silver coins.
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Today it is done through excessive money creation through the printing of, and indeed the electronic creations of billions and billions of dollars, pounds, euros and other fiat currencies. Indeed, today central bankers are creating billions and billions of electronic money simply by pressing a few buttons on a computer.
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Currency wars are set to deepen as most industrial nations in the western world are close to insolvent and look on the verge of recessions – potentially deep ones.
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The fiscal situation of the U.S., the largest economy in the world, is appalling with the national debt having increased from $5.7 trillion in 2000 to over $16.5 trillion today. Besides the U.S. national debt of over $16.5 trillion, the U.S. has off balance sheet debt or unfunded liabilities of between $70 trillion and $100 trillion.
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The U.S. will never be able to pay these debts back and so it will attempt to inflate them away through currency devaluation. This poses risks to the global reserve currency status of the dollar – especially as the world moves to a multi polar world where India, Russia, Brazil and China exert their increasing economic and political power.
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Reblogged this on Yvonne Lazos.