Currency War…It has begun?
While most of the American media is focused on the current Gun debate there is news that’s not being reported that should alarm just about everyone…at least anyone with cash in banks.
Yesterday two things happened in the banking arena:
- Germany announced plans to repatriate their Gold
- Japan announced that they will devalue the Yen
Both of these sound the start of what will likely become a world-wide currency war.
When a country like Germany makes an announcement to get their gold back from France and the United States it shows a lack of trust in currency. The scary part is that the United States and all other fiat currencies are only backed by trust. When other nations lose trust in currency they don’t invest in that currency.
The United States stands as the country with the most to lose when countries lose trust in currencies. Currently all nations use the US dollar for International trade. When countries refuse to hold US dollars and do business with the US dollars the United States is in a bad position. Currently we rely heavily on the world’s trust in the dollar to fun our federal spending. If they no longer fund the spending by holding US dollars the only option left to pay obligations promised is by creating more money. INFLATION
The race to the bottom begins. When a country like Japan announces that they are going to devalue their dollar in efforts to make their trade position more favorable other countries will follow. It is really a tale tale sign of the hideousness of the World banking system when to be competitive a country (or it’s privately owned central bank) will have to devalue its money. INFLATION
The future doesn’t look to bright. We are about to really deal with the debt problem in the United States in a real way. The average American will feel the effects of the out of control federal spending. Prices will begin to rise! Suddenly the $1 Trillion coin might be needed to buy everyday goods. Ok maybe not a Trillion dollar coin…only a Billion dollar bill.
