So here is proof positive that not only China, but a host of other European, South American and Asian countries have been doing exactly the same as China -- manipulating their own currencies downward. And the reason? Because of the Dollar and Euro, who themselves have been so grossly and deliberately manipulated, inflated and devalued by government QE over the past few years (And it ain't over yet, is it?), this has forced these other countries, through the necessity of urgently maintaining their own economies and currency survival, to competitively drive down their own currency's value in order to support their own export trade markets..Another effect of QE from the US is to conveniently inflate away the US Treasury savings(and America's foreign debt along with it) belonging to the surplus countries. So, can anyone here now see why so many of the saver BRICs - including China -- are so pissed at America's own self-serving and manipulative economic policies on their Dollar?
Notably, the blessed American Government is still saying less than zilch about these myriad other country's currency manipulations, but is nevertheless still aiming her own one-sided and hypocritical accusations of currency manipulation at just China. QE is the ultimate initiator and culprit of this currency war, so the American Government owns the greater share of responsibility here. And as for China "causing gross world imbalances" and other tosh and drivel -- well, need I go on? Think chicken or egg. After all, why should the US, Europe and Japan always have it all their own manipulative way? Level playing field my ass...
Nothin' much left to tell, so settle in cosy my friend, get the buttered popcorn, strap yourself in and hold on tight. Relax back, take the phone off the hook and slip that needle carefully onto Willie Dixon's "Goin' Down Slow" or how about "Down in the Bottom" by Howlin' Wolf ? Get yourself in the right mood...
It's simply a race to the bottom now.
Brazil warns of world currency war
The world is in an "international currency war" as governments manipulate their currencies to improve their export competitiveness, said Guido Mantega, the Brazilian Finance Minister.
Published: 10:42AM BST 28 Sep 2010
Mr Mantega's speech to Brazilian industrial leaders on Monday included some of the strongest comments to date by any senior government official on the recent bout of currency intervention by countries, including Japan and China.
Brazil's currency, the real, is now the world's most overvalued major currency, according to Goldman Sachs.
Near a 10-month high against the dollar, the real continued to rise after Mantega's comment as traders bet the government may be waiting for the outcome of Sunday's presidential election before taking action.
"We're in the midst of an international currency war," Mr Mantega said. "This threatens us because it takes away our competitiveness."
With some economies still reeling from the global financial crisis, countries have sought to weaken their currencies to boost exports and improve trade balances.
Currency intervention is likely to be a hotly disputed topic at the next meeting of the International Monetary Fund in Washington, DC, on October 8 -October 10.
Japan, Colombia, Thailand and other countries have been seeking to weaken their currencies to help accelerate their economic recovery.
Low interest rates across much of the developed world have also prompted investors to pour cash into higher-yielding assets in countries such as Brazil, causing further outcry.
"The advanced countries are seeking to devalue their currencies," Mantega said, mentioning the United States, Europe and Japan in the context of what he portrayed as an intensifying trade competition.
Mr Mantega has repeatedly tried to talk down the real. The government last week threatened to use the sovereign wealth fund to buy dollars.
But the government has been reluctant to follow through with concrete measures, and traders bid up the currency near the 1.70 per dollar level, which some see as the threshold for new, stronger action by the government.
Last week's share offering by state-oil company Petrobras contributed to a large inflow of dollars to Brazil, which is attractive to foreign investors because of high interest rates and its booming economy.
Mr Mantega said the country still has an arsenal of tools available to weaken the real, although he did not offer details. Mantega said the government was not considering additional taxes on foreign investments but noted that the government has imposed such controls to hold back the real in the past.
The remarks could be a sign that Brazil's government will beef up efforts to weaken its currency, said Raphael Martello, an analyst with Tendencias consultancy in Sao Paulo.
"He could be preparing the way for a stronger intervention. Since Japan intervened in the currency market, it gave other countries a justification to do the same thing," Mr Martello said.
Japanese authorities intervened to sell yen on September 15, the first such intervention since March 2004, while the United States has vowed to rally global heavyweights on China's currency, the yuan, which many economists say is undervalued.