G20 meeting amid increasing currency tensions

IMG Auteur
 
Published : February 12th, 2013
385 words - Reading time : 0 - 1 minutes
( 3 votes, 4.7/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Crisis Watch

24hGold - G20 meeting amid inc...We saw a slight return of euro jitters in the second half of last week, following comments from European Central Bank President Mario Draghi, hinting that the strengthening euro since last summer was problematic for the eurozone. The currency fell from a high of US$1.36 on Wednesday to below $1.335 this morning, but has recovered slightly. We’ve been hearing more concerns from eurozone leaders about this recently, what with Francois Hollande’s comments on this subject and German finance minister Wolfgang Schäuble expressing “deep concern” about the direction of Japanese monetary policy, with the Bank of Japan now trying to force a substantial depreciation in the yen.

Even the Venezuelans are getting in on the act: with Hugo Chavez’s government last week announcing a devaluation in the country’s fixed exchange rate with the dollar – from 4.3 bolivars per dollar to 6.3 bolivars. Elsewhere in Latin America Cristina Kirchner’s Argentine administration is resorting to evermore farcical attempts to disguise the extent of Argentina’s inflation problem, with supermarkets and electronic retailers now banned from advertising in the country’s top newspapers. This follows hot on the heels of government orders to freeze prices for two months. Unofficial estimates place annual inflation in Argentina at 26%; priced in Argentine pesos, gold has been doing very well recently.

Currency wars will likely again be a hot topic in this week’s financial press, given that Russia is hosting a meeting of G20 finance ministers and central bankers. The Russians, like the Chinese, have been steady gold buyers since 2007 – in fact, as Bloomberg reports, at 570 tonnes over the last decade Russian bullion purchases have actually slightly exceeded official Chinese purchases over the same period. Of course the caveat in that sentence is the word “official”: given the uncertainty about bullion flows around the world – highlighted by this morning’s London Times front page story about Iranian oil-for-gold sanction-busting – Chinese gold accumulation likely far exceeds that claimed in official data.

The point is that the Chinese and the Russians both recognise the simple truth stated by one Russian parliamentarian to Bloomberg: “The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency”. Too bad more people in the West don’t understand this.

Data and Statistics for these countries : Argentina | Japan | Russia | All
Gold and Silver Prices for these countries : Argentina | Japan | Russia | All
<< Previous article
Rate : Average note :4.7 (3 votes)
>> Next article
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
The Fed Is Confused about What Drives Inflation
18 Octneville
Hi Frank, Thanks for your article.......The fact of the matter is that LIES LIKE EVERYTHING ELSE DRIVES INFLATION , which as it so happens is 'THE'...
What kind of person runs for public office ?
17 OctThemis1
I liked the use of the self-actualization chart within the context of politicians and their motives. It probably applies to many in Hollywood as w...
The Silliness of the Bretton Woods Years
16 OctThe Recusant
KUDOS! The book is anti-gold slanted throughout and subtly mocks those that value gold as seen in that silly Las Vegas Golden Rooster tale. As I pr...
The Future (Not)
14 OctS W.-1
I have it on good authority that the Aliens living in Antarctica have discovered a way of turning Ice into Oil. All we have to do to secure ou...
Betrayal!
09 OctThemis1
I agree 100% with all the points you made. You have summarized my own anger and the reasons for it. My only consolation is that I believe the eli...
A silver price-suppression theory gets debunked
07 OctDoom-1
I think he linked the wrong article, because there's minimal facts and logic there relevant to price suppression. It's a shame, because I really wo...
Light It Up
07 OctThemis
I keep wondering whether the US is fermenting a war with North Korea so as to indirectly draw China in and delay implementation of the yuan-for-oil...
One Nation Under Gold (2017), by James Ledbetter
05 OctThe Recusant1
Sadly, I too hoped for a more even-handed assessment of gold in our economic history. The book IS biased and by the time I got to the 20th century ...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS