A global war of currency depreciation has begun. Although the weapons are not killing anyone, the slow damage will be no less devastating than nuclear, chemical or biological warfare. In a worst-case scenario, there will be a substantial redistribution of the income and wealth of all nations and an even wider gap between the rich and poor.
The war has now spread to Denmark, Singapore, the EU, Switzerland, Japan and even South Korea and Taiwan. The weapons used include banknotes, central bank control of foreign exchange and interest rates, and vultures (hedge funds) in the financial markets defending and speculating on the currencies. Continue reading
Following the biggest rout to the Ruble in ages, Russia – unlike Mario Draghi – instead of talking the talk decided to walk the bazooka walk and shocked all those long the USDRUB by unleashing an emergency rate hike (at 1 am in the morning) from the recently raised interest rate of 10.50% to… hold on to your hats… 17.00%, a 650 bps increase! Continue reading