“Currency Wars” Against Whom?

10 Feb

Inflation & Gold

Inflation & Gold (Photo credit: Paolo Camera)

When you have a “war,” it is presumably waged against a particular “enemy”.  If the governments of the world are about to engage in “currency wars,” who, pray tell, are their enemies?

PremiseBy inflating its currency and thereby lowering its currency’s value, a nation fosters its “competitiveness” in foreign markets—but simultaneously robs its domestic creditors of their savings and robs  its own working people of their standard of living. 

•  Inflation makes the fiat dollar “cheaper” and thereby benefits two primary groups:

1) Exporters (multinational corporations).  Inflation makes it easier for foreign buyers to purchase American products, and thereby “stimulates” an increase in sales and jobs for American exporters.

2) Debtors—especially the national government (the world’s single biggest debtor)—since inflation reduces the national debt in terms of its value or purchasing power.

Thus, inflation serves both big government and multinational corporations.

Curiously, big government and multinational corporations are the cornerstones of fascism, global government and the New World Order.

•  The Associated Press recently published an article entitled, “Japan’s Nikkei 225 index soars as yen wilts


“Japan’s benchmark stock index hit a 32-month high Friday as the yen continued to retreat against the dollar and investors cheered the new government’s plans to boost the economy.”

By means of inflation, the Japanese government will “boost” (stimulate) their economy in order to export more Japanese products to foreign countries.  On the face of it, this “stimulation” sounds like a great idea since it should result in more sales for Japanese exporters and more work and jobs for the Japanese people.

But how does that “stimulation” actually work?

It works by inflating the Japanese yen (a fiat currency) to make it less valuable.

By making the yen less valuable, Japan’s “big exporters” (read, “multi-national corporations”) are able to reduce the price of their products to foreign buyers.  As the Japanese yen becomes less valuable, products priced in Japanese yen become “cheaper” and more affordable for foreign buyers.  As foreign buyers purchase more Japanese products, the Japanese economy is “stimulated” by additional sales, resulting in more work and jobs for the Japanese people, more profits for Japanese exporters, and more tax revenue for the Japanese government.

It sounds like a pretty good deal, all around—until you realize that inflation robs the “investors” and savers of their wealth, and robs the workers by diminishing their real wages.


•  The Associated Press article claims that “investors cheered” the Japanese government’s decision to inflate the yen by 2% per year for some time into the future.

By definition, “investors” are ultimately people or institutions that have:

1) lived within their means;

2) accumulated some savings; and, therefore

3) have the wherewithal to lend and “invest” those savings in other businesses, commodities, bonds, stocks, etc.

But inflation—which “stimulates” an economy—diminishes the purchasing power of fiat dollars and thereby robs investors of their savings . . . and thereby removes the private wealth needed to foster real economic growth.

For example, under the new Japanese 2%/year inflation, the wealth (savings and pensions due) of Japanese people will be diminished by 2% per annum on into the foreseeable future.  After 10 years, the purchasing power of 100 million of today’s yen will be reduced to about 82 million.  Over ten years, 2% inflation will cost the “investors” 18% of the value of their currency.  Thus, the Japanese investors are being robbed of their savings and their pensions—by their own government—in order to “stimulate” the Japanese economy and thereby serve Japanese exporters.

Nevertheless, Japanese “investors” are cheering their government’s attempt to “stimulate” the economy by causing more inflation and thereby robbing the same “investors”. 

What th’ hell are these “investors” cheering about?

“Evan Lucas, analyst at IG Markets in Melbourne, said he expected to see further surges in Japan’s Nikkei 225 index after a Japanese government official indicated that the yen would fall further, helping the company’s big exporters.”


Exactly.  “Yen-flation” will help Japan’s “big exporters”—but it will rob the frugal, responsible Japanese “investors” of their savings and pensions.

And the Japanese people say, “Yaaaay!!! . . . We’re being robbed by our own government!!!!

It’s like watching an old Monty Python comedy skit.  It is to laugh—and sometimes wince.

•  (Reuters)—Recently, at the World Economic Forum, Chile’s Finance Minister Felipe Larrain said,

“Chile’s government would support any intervention by the country’s independent central bank to weaken the strong peso. . . . We’re trying to prevent further appreciation of the Chilean peso.”


If the Chilean government allowed the Chilean peso to “appreciate” (deflate) and become more valuable, the Chilean exporting corporations would be less able to sell Chilean products to foreign countries—and thus make less profits for exporting, multinational corporations, their investors and executives.

But, at the same time, if the Chilean peso appreciated (deflated) and grew more valuable, the Chilean people paid in Chilean pesos would be able to buy more products from each other or from foreign countries.  The people could have to work less and still maintain their standard of living.

Thus, inflation enriches exporting corporations but impoverishes the people who work for and/or have saved Chilean pesos.  Inflation is a means to enrich the globalists, while impoverishing the people who stay on the land of a particular nation.

The implied promise of “inflation” is always that as corporate exporters make more money, that money will “trickle down” to the common people.  Generally, that promise is a lie.  The only money that will trickle down from major corporations is that which “trickles down” to local legislators as bribes (“political campaign contributions”) to pass more special-interest laws that will enrich those corporations.  Except in rare instances, the common people will not enjoy any new-found income.

•  While inflation can increase corporate profits derived from foreign trade (exports), inflation is largely unseen within the context of a particular country.  It’s not invisible, per se, but the average person is generally unconcerned by inflation—unless the rate of inflation becomes too great to ignore.

As a result, the working people don’t generally realize that they’re being robbed by inflation.  More, they don’t realize they’re being robbed and impoverished—not by accident, but by intent—by their own government.

Of course, inflation also favors any government that’s deeply in debt since inflation allows governments to repay its debt with “cheaper” fiat currency.  Thus, by means of inflation government is also able to rob its creditors.

•  In the end, one of inflation’s two primary objectives is to sell, sell, sell domestic products to foreign countries—but not to sell domestically.

During times of inflation:

1) first, the prices of domestic products rise; and

2) only later (if ever) do wages follow.

During inflation, workers are constantly playing “catch-up” and usually falling further and further behind in terms of their capacity to purchase domestic goods.  During inflation, domestic workers are increasingly impoverished as they work the same number of hours (or more) for increasingly “cheaper” dollars and thus have less to spend in return for their work.

Their work is very much like the principal (currency) loaned to businesses by ordinary “creditors”.  Common people work as quasi-creditors in that they provide tangible, productive effort to their employer now in return for their employer’s promise to pay them later.

But, thanks to inflation, that promise is never completely kept.  Ohh, the workers are paid, alright, but thanks to inflation (in terms of purchasing power) they are never paid in full.  Each year they lose 2% (if that’s the inflation rate) of their purchasing power . . . and then another 2%  . . . and then another 2%, etc.  At the end of ten years, 2% annual inflation will reduce the worker’s pay (in terms of purchasing power) by 18%.  The workers’ real standard of living will have been reduced by 18%.  The workers savings and pensions will have been reduced by 18%.

The value of investors’ principal will have been reduced by 18%.

Thus, inflation always impoverishes the creditors (those who’ve lived within their means and saved some of their wealth) and workers (those capable of making a productive effort but who haven’t usually saved much of their previous earnings).

And who does inflation enrich?  Predators.  Parasites.  Dependents.  Borrowers.  Hustlers, con-artists, politicians, big government, and the stockholders and executives of multi-national corporations.

Inflation serves and enriches the parasites and robs the productive.


•  All of which leads us to current reports of a mounting, global “currency war”.

(Oooo—a currency war!  How exciting!)

It sounds dramatic and mysterious, but what, exactly, is a currency war?

And more importantly, who is such warfare waged against?

As an example of currency war, Egon von Grayerz (founder of Matterhorn Asset Management in Switzerland), recently described the “currency war” that’s been ongoing between Japan and South Korea for the past 30 years.  According to Mr. Grayerz,

“Since 1982 the [South Korean] won is down 77% against the yen.  What’s happening to Japan as a result?  Most [Japanese] companies are doing very badly; both technology and car companies are hurting.

“But in Korea we are seeing major industries emerging.  Samsung, Hyundai, Kia are all extremely successful.  The major reason for this is the currency moves.  This is why countries want to devalue” (inflate) their currencies.

Thus, it appears that:

1) Currency wars are “fought” means of inflation.  Nations seek to stimulate their export industries by making their national currency less valuable relative to foreign countries’ currencies.

2) Japan’s (or Chile’s) recent decision to inflate their currency seems to make sense. But,

3) Each nation waging currency warfare is engaged in an irrational “race to the bottom” as each struggles to prove that its currency is worth less than the currencies of other nations.  Inevitably, currency war will prove that all fiat currencies are worthless.   Currency war is suicidal and irrational for national economies, nevertheless they take place.  Why?  Because modern currency wars are fought with fiat currencies which are, by nature, irrational in themselves.

•  We can anticipate that the US gov-co will cause more inflation of the US dollar in order to remain “competitive” in exports.  But gov-co will almost certainly blame our coming inflation on Japan.  Our coming “currency war” will be blamed on the “dirty Japs” who initiated 2% inflation per annum for the yen.

But, you can bet that the Japanese are blaming their newly-declared 2% inflation on the currency war already started several years ago by the US efforts to inflate the US dollar by means of QE’s 1, 2 and now 3.

Under the guise of “currency war,” both the American people and the Japanese people will be taught to blame their national inflation on some foreign government.  Insofar as any people blame their currency war on a foreign entity, their natural sense of nationalism and patriotism will tend to compel them to support and even fight for their government’s ongoing inflation.

But, is our nascent currency war really directed at a foreign country?  

Insofar as inflation robs domestic creditors (people who were productive in the past and saved some of their income) and domestic workers (people who are productive now) by reducing the value of their savings and labor, isn’t the inflation of any nation’s currency really an attack on the domestic workers and investors of that nation?  Doesn’t inflation of a nation’s currency necessarily diminish the standard of living of that nation’s people?

If so, who does our government regard as the real “enemies” in our coming currency war?

Is today’s currency war really being waged against some foreign country?  Or is it being waged against you, me and the vast majority of the American people?

•  Insofar as “currency war” (global inflation) increases business and profits for each nation’s exporters, “currency war” favors multi-national companies.

Insofar as “currency war” reduces the value of the national currency, it favors debtors since they can repay their debts with cheaper dollars.  Since the US gov-co is the world’s biggest debtor, “currency war” (waged by inflation or even hyperinflation) clearly favors our government’s interest in repudiating much of the national debt.

If currency war favors exporters, debtors and highly-indebted governments—who are the government’s natural victims, opponents, and even enemies in currency wars?

A:  The productive people of each nation who depend on their income from their work or savings to support them.

Thus, the primary “enemy” that’s being attacked by the Japanese government in its current “currency war” is the Japanese people.  They are going to be increasingly underpaid and impoverished.

Likewise, the primary “enemy” that’s being attacked by the Chilean government in its current “currency war” is the Chilean people.  They are going to be increasingly underpaid and impoverished.

And, of course, the primary “enemy” that’s being attacked by the US government in its current “currency war” is the American people.  We will be increasingly underpaid and impoverished.

Under the pretext of “currency wars” that are allegedly directed at foreign countries, governments wage currency war (inflation) against their own people.

•  How can ordinary people defend themselves against currency warfare?

1) Demand to be paid for their work in an un-inflatable money like gold or silver.  (Of course, such demands are currently almost impossible to affect.)

2) Convert as much of your income as possible into an un-inflatable savings like gold or silver.

3) Know your enemy.  Recognize that your government’s currency wars (inflation) aren’t being waged against some foreign country—they’re being waged against Americans who save their income and/or are currently productive workers.  America’s “official” inflation rate is about 2%.  At that rate, your wages, savings and standard of living will lose 18% over the next decade.  But John Williams ( says the real inflation rate is about 5%.  At 5% inflation, your wages, savings, pensions and standard of living could lose 39% of their purchasing power the next decade.  Gov-co may claim that “they’re here to help you,” but they are actually here to help themselves—by seizing your productive efforts.

4) Recognize that all currency wars and inflation are intended to cause average people to work for less and slide slowly, inexorably into a lower standard of living and deeper poverty.

5) Stop being fool enough to cheer whenever your government wages war against you, your neighbors and America by inflating the fiat dollar.


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6 responses to ““Currency Wars” Against Whom?

  1. Anthony Clifton

    February 10, 2013 at 9:06 PM

    printing lies never changes truth, even if the lie factory owners declare themselves sovereign and have a virtual monopoly on ink and hemp paper…

    notwithstanding, those curious contrarians that spend 3 “dollar” bills into circualtion and spread brush fires in the minds of those that seemingly are in a miasma, a lingering fog bank of doubt and confusion….

    inflation…who causes what to inflate…who determines Value ?

    the little understood financial process which shapes our economic path as individuals and as nations, accounting for the demoralizing inflationary effect we find almost everywhere.

    Knowing truth liberates from LIES…

    even printed ones…

  2. Jr

    February 10, 2013 at 9:15 PM

    Love the article.
    you know what gets me you hear a weak dollar will collase the world economy..Now Bsinessinsider saying saying a strog dollar its incredible how they play with th mind of the people..Cant trust nobody ti give you truth within the circle of media..Love your work keep it coming.(.Gb)Godbless..

  3. Anon4fun

    February 10, 2013 at 10:40 PM

    Regarding gold as a means of preserving your wealth in the present circumstances, I agree that it’s a safer bet than FRNs. However, as to the “un-inflatability” of gold, some points to consider:

    Firstly, for some years we have been watching a real life demonstration of how gold can be devalued by the creation of instruments of credit, i.e. paper gold, through a process essentially similar to an inflationary run of the fiat currency printing presses. So we know from experience that gold is not immune to this type of depreciation.

    When GATA made waves by filing suit against the gold cartel for this type of market manipulation, the list of defendants (below) was curiously reminiscent of the cast of characters behind the central banking cartel.

    Goldman Sachs
    JPMorgan Chase
    Deutsche Bank
    International Monetary Fund
    Exchange Stabilization Fund (US government)
    Bank for International Settlements
    Alan Greenspan
    William J. McDonough
    Lawrence Summers (US government)
    Paul O’Neill (US government)

    Secondly, we also know, in this case from basic math, that inflationary paper gold is a necessary component of a gold standard whenever a significant portion of the money supply is loaned at interest. Otherwise, if the money supply remains entirely backed by physical gold (of a more or less fixed quantity), and the bankers lend, say, 10 percent of it at 6 percent annual compound interest, in 40 years they end up owning all the money in circulation.

    Avoiding this outcome requires either the introduction of paper gold, in order to expand the money supply to accommodate the bankers’ interest charges without bankrupting everyone else while doing so, or the prohibition of interest. Presumably it is unnecessary to explain why the option of the economy getting by without credit is a non-starter.

  4. pop de adam

    February 11, 2013 at 9:37 AM

    Every dollar(FRN) in your pocket or in an account was created from some loan either issued or floated before it came to reside with you. How could you ever earn enough of them to both service the debt with interest and maintain a standard of living? The only way this works in my mind is if one subset of the people can do one of these while extracting the other deficiency from another subset of people. This creates a predatory class hidden somewhere in the whole, it would be difficult to even seperate them out, even if they themselves recognized it, the real predators are the ones who promulgated the scheme to begin with.

  5. EarlinOregon

    February 14, 2013 at 1:13 PM

  6. Andrew

    April 2, 2013 at 1:09 PM

    This may be a little off topic, but speaking of currency wars, Have you heard about “BRIC”? It is an economic union between Brazil, Russia, India and China, which has now expanded to include Australia and South Africa. They are leaving the “dollar” or “petro-dollar” currency. They are breaking away from any dependency on the “West” for banking and currency altogether.

    If I am understanding history correctly, “All wars are banker wars.” That is, the “Western” banking system of Britain and America (e.g. the Rothschild) have been behind all wars. If that is true, then it seems to me, the formation of BRIC is a direct threat to the West’s banking system, so we will soon be going to war with those nations under some pretense other than the truth of the threat the BRIC is to the Western monetary system. Perhaps Korea will be the pretense, but the war will be against BRIC.


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