Will the currency war break out?

Will the currency war break out?
Jan 17, 2008 02:50
DREAMLIFE Points: Join Date: Sep 5, 2007 Status: offline	'China should sell its holdings of US dollars to knock down US', 'When the exchange rate between US dollar and Euro reaches 1.4 :1, US will launch the war against Iran' and ' We should recover gold standard system to destroy dollar'. Do you ever hear them before? These statements are made by several best-sellers in 2007. One of them wrote a book called War of Currency. He calls on Chinese people to keep alert on the financial war or currency war. According to that book, a currency war might break in the future and China should keep alert on it. What do you think of his words? Will the currency war really break out?

Jan 17, 2008 02:50

DREAMLIFE
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Join Date: Sep 5, 2007
Status: offline

'China should sell its holdings of US dollars to knock down US', 'When the exchange rate between US dollar and Euro reaches 1.4 :1, US will launch the war against Iran' and ' We should recover gold standard system to destroy dollar'. Do you ever hear them before? These statements are made by several best-sellers in 2007. One of them wrote a book called War of Currency. He calls on Chinese people to keep alert on the financial war or currency war. According to that book, a currency war might break in the future and China should keep alert on it.

What do you think of his words? Will the currency war really break out?

Jan 17, 2008 09:46

MARRIE
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Join Date: Jan 7, 2008
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sharp drop of U$ seems impossible coz U$ holders as exchg reserves worldwide, which is the natural defense of the devaluation of U$;

US economy is still the strongest one and other nations are confident on US economy;

P.R.China, I guess, is now holding the hugest amount of U$ comparied with other economic powers, devalution of U$ suffer china severe losses;

so it seems that U$ system still hard although US gov. gets its currency depreciated to balace its fiscal deficits.

and U$ still pegged to GOLD BULLION SYSTEM, gold value sores with the devalation of U$, so i am confused by saying that destroying gold system...

Jan 18, 2008 16:59	#2
GARYKINKADE Points: Join Date: Jan 8, 2008 Status: Offline	Thanks Dreamlife for your info. on the "War on Currency" book. Are there several others that you can remember or suggest? Maggie, if the US $ is pegged to the Gold Bullion System then I'm completely ignorant about it. I was under the assumption that the US$(s) was nothing more than a piece(s) of paper backed by nothing, at least for the US consumers anyway. You all have a good day.

Jan 22, 2008 00:30

KEVIN0518
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Join Date: Mar 13, 2007
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Quote: "so it seems that U$ system still hard although US gov. gets its currency depreciated to balace its fiscal deficits. and U$ still pegged to GOLD BULLION SYSTEM, gold value sores with the devaluation of U$, so I am confused by saying that destroying gold system... "

After the Bretton Woods System was established, all currencies were then linked to the dollar by exchange rates fixed at some par value. And the dollar was linked to gold. Personally, I think that there are some differences between gold standard system and Bretton Woods System. In Bretton Woods system, dollar plays the important role, not the gold. What’s more, during 60s to 70s in 20t century, dollar had depreciated very much. Even the US Fed refused to pay gold to those foreign nations. This means that the Bretton Woods system collapsed. In 1970s, a new exchange rate system was introduced, that is, floating exchange rate system. Under this system, dollar’s role in international trade had been reduced. Euro’s popularization is a good example to illustrate this.

Jan 22, 2008 11:07

MARRIE
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Join Date: Jan 7, 2008
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qoates: ''In 1970s, a new exchange rate system was introduced, that is, floating exchange rate system. Under this system, dollar’s role in international trade had been reduced. Euro’s popularization is a good example to illustrate this. ''

FLT ex system based on mkt bidding and asking and involves manipulation, which is the cons. i thinck the original topic of this thread - crush U$ system - can be resoloved to this system coz in currency mkt now lots of gov buy/sell U$ reserves to balance their fiscal budget -export

euro currency mkt has less regulations/taxation helps capital free flow and makes trade more effecient, but it doesnot necessarily denominated in EURO $, it's a diffrent concept. this mkt could be in hongkong, singapore in u$ for trading..

but i am still confused why reverse moving between u$ and value of gold, ie, gold up then u$ down, vice versa...

Jan 22, 2008 17:54	#5
GARYKINKADE Points: Join Date: Jan 8, 2008 Status: Offline	For a short expose' and maybe somewhat cynical analysis of the U.S. monetary policy go to Globalresearch.ca and read article called "The Financial Tsunami" by F.William Engdahl

Jan 23, 2008 13:19	#6
MARRIE Points: Join Date: Jan 7, 2008 Status: Offline	Mr. Kinkade, I will digest the article u sugested. Hopefully it can answer my question. BTW, the website introduced is of politics - boring...thanks anyway.

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