New Currency Wars Cometh – Gold To Be “Last Man Standing”

Tuesday, November 11, 2014
By Paul Martin

By: GoldCore
GoldSeek.com
Tuesday, 11 November 2014

Currency wars are set to warm up again, after Japan’s radical decision to further debase its currency through an intensification of already significant monetary easing. There was a palpable coldness from China’s Premier Xi Jinping as he greeted Japan’s President Abe at the APEC summit in Beijing.

Tensions are normally high between the two countries but are even more so in recent months.

War grievances run deep and are never far below the surface. Along with South Korea, these are the big industrial powers of Asia who are competing for a share of the shrinking export market.

China’s economy is slowing. Official figures suggest that growth has slowed to around 7%. Some analysts say it is as low as 5%. While Western countries would rejoice at such figures it must be remembered that in 2012 China’s growth in GDP was over 10%.

The decline has affected employment in China which is causing social tensions. The U.S. has put diplomatic pressure on China to not devalue its currency in recent years. So the Chinese resent Japan’s unsignaled and unilateral debasement of their currency, especially if it comes with the blessing of the U.S.

It would appear as though Japan’s actions were not taken at the behest of Japan’s financial elites, even though they stand to gain the most from QE in the short term – especially if the U.S. experience is anything to go by.

How China will respond remains to be seen. Recent renminbi currency swap deals with Canada and Qatar show the increasing risk posed to the dollar’s status as sole global reserve currency.

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