A world currency war has broken out as countries scramble to keep their currencies from collapsing. Japan has cut interest rates to zero in an effort to pump out enough Yen to counter its rise against the USD and has been selling Yen for USDs. India is experiencing a high rate of inflation as foreign currency flows in and a long list of countries from Columbia to Israel have been trying to drive down the value of their currency by buying other currency.
China’s premier, Wen Jiabao speaking in Brussels warned that forcing Beijing to revalue its currency would lead to a “disaster for the world”. (not an idle threat) While China has in theory removed controls over its currency it has only appreciated 2% against the USD while the disparity is really 40%. At the same time the Renminbi has fallen against the Euro by 11% and the Europeans are feeling the pinch.
The USD is falling and gold has set yet another new record at 1349 up nine dollars from yesterday. Treasuries are also down and this is increasing pressure for the Federal Reserve to engage in “quantitative easing” or more simply put they want to tinker with supply and demand by buying a couple of trillion in US debt instruments to reduce the supply. None of that free market nonsense when it comes protecting the wealth held by the upper class.
The lower and middle classes can be wiped out in a heart beat and it will be a matter of “personal responsibility”. But we must protect the wealthy because they, they, they create all the jobs! Millions and millions of jobs, in China and India of course. They’ve used Walmart and the other big box stores to wipe out the entire merchant class in this country. They used the retail monopoly they created from that to force 40,000 factories to move production out of the county or put them out of business entirely.