China is ready for currency war

China Currency WarThe deputy governor of China’s central bank, Yi Gang, said that the country was prepared for weakening currencies in the United States and Europe, and now Japan.

Worldwide, the central bankers are already in a currency war, so this policy statement should not come as a surprise.

Noteworthy is the fact it was publicly and bluntly stated.

Highly indebted nations weaken the value of their currency by cutting interest rates down to zero to gain some trade advantages and pay less debt service on their bonds.

Until recently, the currency war has been mostly fought between the Dollar and Euro.

But from now on, the BRICS economies will join in, too. Currency debasement turns into “war” as soon as multiple countries are involved.

Japan’s throws itself into the fight recently

Ever since Japanese Prime Minister Shinzo Abe took his post last year, the yen’s lost 20% of its value against the dollar.

China is fully prepared,” Yi was quoted saying in the China Daily.

“In terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries.”

Currency war escalating?

Yi’s statements raise more questions than answers.

“Fully prepared” can only mean: printing money and accelerating central banks money growth rate.

The US and Japan are already conducting QE (Quantitative Easing) with no clearly formulated exit strategy.

The statements by Yi perhaps may be an indication the already ongoing war is about to escalate.

Source: Forbes – “China Official Says Ready To Battle Weak Dollar, Euro”
Source: Global Economic Analysis – “China “Fully Prepared for Currency War” Says China’s Central Bank Deputy Governor”
 


Categories: Finance & Economy

Tags: , , , , , , ,

4 replies

Trackbacks

  1. China’s ambition to become global currency has a long way to go | China Daily Mail
  2. Children, money and international relations between China and Japan | China Daily Mail
  3. Is Japan’s Devaluation an Attack on China? | The Currency War

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: