bacpacker
02-20-2013, 01:03 AM
I just ran across this story about the latest G20 summit. Funny thing I hadn't heard anything about this summit. Usually it's plastered all over the news for at least days if not weeks. This time seemingly nothing. Here is a link to the story and a little bit from the story itself.
http://business.financialpost.com/2013/02/18/g20-currency-war-promises-unlikely-to-end-devaluation-debate/
Economy
G20 currency war promises unlikely to end devaluation debate
Jan Strupczewski, Reuters | Feb 18, 2013 9:35 AM ET
More from Reuters
A devaluation of a currency, whether deliberate or just a side-effect of monetary policy, is still a devaluation.
Illustration by Juan Carlos SolonA devaluation of a currency, whether deliberate or just a side-effect of monetary policy, is still a devaluation.
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MOSCOW – Financial leaders from the world’s 20 biggest economies may have promised not to devalue their currencies to help exports, but the pledge will do little to keep exchange rates stable.
While G20 finance ministers and central bank governors can promise not to devalue their currencies directly, there can be no guarantees while central banks are pumping money into economies to make them grow again.
“We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes,” the G20 financial leaders said in a closing statement after meeting in Moscow on Friday and Saturday.
How investors can win the currency war
While a currency war has broad economic consequences for the global economy, it also creates opportunities for investors.
Read the full story here.
But it is precisely the ultra-loose monetary policy of the U.S. Federal Reserve or Bank of Japan, aimed at helping their domestic economies to grow, that depressed the dollar and the yen and sparked the whole competitive devaluation debate.
That trend is unlikely to change, something China and other key emerging markets were quick to warn against in Moscow.
Fed chief Ben Bernanke said on Friday that “the United States was using domestic policy tools to advance domestic objectives.”
Tokyo in turn insists that the Bank of Japan’s pledge to start buying unlimited amounts government bonds is purely to help its shrinking economy get out of recession.
The G20 agreed there was nothing wrong with such policies.
I just heard a story last night about fuel prices. It was stated that fuel cost had risen everyday for the past 30. I know around here, we've went from the mid $2.80 to now $3.59 in that period. Family in Michigan told the wife they are now over $4.00/gallon now. This is typically one of the least expensive times to buy gas thru the year. If this keeps up the summer travel season is gonna be bad. IMO food cost will follow pretty quickly along with most everything else. Seems like the Non inflation is taking a foot hold.
http://business.financialpost.com/2013/02/18/g20-currency-war-promises-unlikely-to-end-devaluation-debate/
Economy
G20 currency war promises unlikely to end devaluation debate
Jan Strupczewski, Reuters | Feb 18, 2013 9:35 AM ET
More from Reuters
A devaluation of a currency, whether deliberate or just a side-effect of monetary policy, is still a devaluation.
Illustration by Juan Carlos SolonA devaluation of a currency, whether deliberate or just a side-effect of monetary policy, is still a devaluation.
Google+
Comments
More
MOSCOW – Financial leaders from the world’s 20 biggest economies may have promised not to devalue their currencies to help exports, but the pledge will do little to keep exchange rates stable.
While G20 finance ministers and central bank governors can promise not to devalue their currencies directly, there can be no guarantees while central banks are pumping money into economies to make them grow again.
“We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes,” the G20 financial leaders said in a closing statement after meeting in Moscow on Friday and Saturday.
How investors can win the currency war
While a currency war has broad economic consequences for the global economy, it also creates opportunities for investors.
Read the full story here.
But it is precisely the ultra-loose monetary policy of the U.S. Federal Reserve or Bank of Japan, aimed at helping their domestic economies to grow, that depressed the dollar and the yen and sparked the whole competitive devaluation debate.
That trend is unlikely to change, something China and other key emerging markets were quick to warn against in Moscow.
Fed chief Ben Bernanke said on Friday that “the United States was using domestic policy tools to advance domestic objectives.”
Tokyo in turn insists that the Bank of Japan’s pledge to start buying unlimited amounts government bonds is purely to help its shrinking economy get out of recession.
The G20 agreed there was nothing wrong with such policies.
I just heard a story last night about fuel prices. It was stated that fuel cost had risen everyday for the past 30. I know around here, we've went from the mid $2.80 to now $3.59 in that period. Family in Michigan told the wife they are now over $4.00/gallon now. This is typically one of the least expensive times to buy gas thru the year. If this keeps up the summer travel season is gonna be bad. IMO food cost will follow pretty quickly along with most everything else. Seems like the Non inflation is taking a foot hold.