MAY 1, 2015 8

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Gamesmith94134: The Dollar Joins the Currency Wars

Did we not start the currency war already by using liquidity and its monopoly to create inflation on the neighbors that we can buy? By establish the TTIP and TTP that took the world by its horns to entitle America to the underwriter of all commodities and equity? Now, they took the leverage to thwart off their inflation and level their interest rate to invest in America? Perhaps, I agree with Mr. Nouriel Roubini that “The world would be better off if most governments pursued policies that boosted growth through domestic demand, rather than beggar-thy-neighbor export measures.”; but I disagree on the adequate depreciation of dollar is solely on the zero sum solution, because it was not how dollar rose above all currencies from its 3% growth, while India and China are up 7% and theirs depreciated. Perhaps, it was not quality, but quantity easing that cut our interest rate to ground zero and cut their inflation and interest rate too. Some may reason of the most favorite nations or the corporate sovereign that made them did it; but I would blame on the leverage it has developed favoritism on dollar. It is how they depreciated theirs to invest on our 3% growth economy is bloating the dollar in reverse the leveraging on their currencies.

While our DJ rose to 18,000 and equity grew over 140% in market size from 2008, we spent trillions on loans and bonds to make it attractive and liquidity gave excellent returns on both. Now, the QE is gone; and the cut their reserves because of dollars. It means investors will stick to America like leeches because they did not buy the equivalent in dollar and they need dollar to repay us; or they will suffer like Russia or Venezuela by selling their cheaper. It is how they depreciated theirs. Perhaps, US will thrive at 3% growth by the end of the year; but it will be costly to sustain the dividends or return at the adequate level. The way I see more of the corporate are cutting their expenses and labor cost by shrinking the development or splitting themselves into smaller sizes; and layoff from Wal-Mart or IBM may not be the plumbing problems but clotting up within the Congressional circuitry. So, the elephant in the room is the trade policy but the leverage we created; demolishing the most-favorite-nations or imposing tariff trigger the retardation. It is the leverage used on Beggar-they neighbor; and they are putting America on now. I don’t think the debate on how the IT person earning six figures is quitting rent (40% of his gross earning) in San Francisco; or cities is on the edge of bankruptcy that only happens in China. But it certainly gives us another look on the 2% marginal inflation as the Fed intended, after the price of a burger on McDonald if the lowest wages is raised. Is 15 dollar per hour appropriate on living wages? Or do I complain of the 9 trillion loans and bonds gave foreigners a good head-start? These must be contemplated in the sustainable government.

Perhaps, the only solution is to raise the interest rate by the FED can reclaim the quality control and the quantity easing is ended. With such, it gives the breathing room on the pensioners and currency manipulators a sign, which we are going to balance the books without manipulating ours; and depreciation is plausible and deflation may not be stop. Then, everyone should make a better use of their money instead of making the equity market like a casino.

Again, I must raise the essence of those transcontinental transfers that a universal monetary policy will prohibit them from repeating the beggar-thy-neighbors and everyone is accountable for responsible investment and protection; that we must demand insurance like 1% on every assigned the continental transfer to enter in each zones like ASEAN, North America, OAS, Africa Union, and Eurasia economic Union. Perhaps, it may not be a game like casino that bet on the interest rate or currency exchange differentials if one must gain 2% to a full return. I would suggest the World Bank and development bank under the control of the Zones to facilitate the funds to insure on the exchange rate and appropriate loans during the difficult times.

As in the exchange rate by IMF and other, we can establish the quarterly evaluation on performance of each currencies have accomplished and how each currencies should be scrutinize by its peers within the zones that we can eliminate the unnecessary propagandas in isolation or formation of cartel to monopolize. Otherwise, we can never have a global trade policy that is free from manipulation and monopoly. I have seen more transparency and political problems in TTP and TTIP; and they performed less successfully in the past with more resistance. I think the old GATT must be rewritten in a universal platform by World Trade Organization; and we can go back to the rules of the best quality that is sustainable, instead of quantity that invasion prevails like a casino.

Beggar-thy-neighbor is prohibited by the universal reckoning, let the New World Order begins.

May the Buddha bless you?

