China yuan strengthens to new high against USD (Jan 2014)

Renmimbi-Yuan

Source: Xinhua – China yuan strengthens to new high against USD

Notable excerpts:

The Chinese currency Renminbi, or the yuan, marched to a new record high against the U.S. dollar on Monday.

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Japan Wages Pressured by Fastest Inflation Since 2008 (Dec 2013)

BOJ

Source: Bloomberg – Japan Wages Pressured by Fastest Inflation Since 2008

Notable excerpts:

Japan’s inflation accelerated to the fastest pace since 2008 last month, bringing the rate closer to policy makers’ target while threatening to erode household spending power unless employers boost wages.

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Quote of the Week – Ben Bernanke

“Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

– Ben Bernanke, 2002

Confidence – the emotion that holds all fiat currencies together

rain_money

Source: BullionStar – Confidence – the emotion that holds all fiat currencies together

The United States had no legal tender laws until 1862 when the US government enacted them to ensure that the public would accept the paper notes that were issued. These notes were nicknamed greenbacks – a name that is still used today to describe the US dollar. The US government had issued these notes when it needed to finance the Civil War. Hard money in the form of gold and silver had curtailed their overspending. Unfortunately, a war had to be won even if they could not afford it.The issue of paper notes allowed the government to finance the war now but pay… in the future.

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Currency devaluation becomes the solution to all economic problems

Japan's Prime Minister Shinzo Abe attends a news conference at his official residence in Tokyo

Source: BullionStar – Currency devaluation becomes the solution to all economic problems

Days before Shinzo Abe became Japan’s prime minister in December 2012, he remarked “Central banks around the world are printing money, supporting their economies and increasing exports. America is the prime example. If it goes on like this, the yen will inevitably strengthen. It’s vital to resist this.

Shinzo Abe’s remarks summarized a prevalent theme in central banks’ attempts to jumpstart their domestic economies today – money printing. I prefer to call it currency printing since it is fiat currencies that are being created out of thin air.

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