China ratings firm warns of global 'currency crisis'

China Post

BEIJING -- Rising sovereign debt levels in advanced economies are spawning a crisis that threatens to topple the dollar and other reserve currencies, a Chinese credit ratings agency warned Monday.

Dagong Global Credit Rating said developed economies were spawning a “currency crisis” by trying to prop up their economies through loose monetary policies following the 2008-2009 financial meltdown.

Dagong says it is an independent private company but its chairman has previously advised the Chinese government, which has the world's largest foreign exchange reserves.

“In this stage, the world will more actively look for a new currency other than the U.S. dollar, euro, Japanese yen and British pound to replace the current international currency system,” the report said.

The document did not mention the Chinese yuan as an alternative, but clearly suggested that China's economic fundamentals and rising global influence mean the country is poised to play a leading role.

Dagong said that efforts by China and other “emerging creditor countries” to stimulate their own internal demand meant they were destined to play a leading role in safeguarding the global financial system.

“They will become the leading force to protect the stability of international credit,” the report said.

Loose monetary policy, money printing, currency debasement by central banks could be a catalyst for a global currency crisis where the world will begin to search for a new reserve currency according to China's Dagong rating agency. Seems likely. Kind of wonder though if currencies are all worthless relative to each other then one is no better or worth more than the other which would only mandate a new reserve currency replace the basket of reserve currencies we see today. Probably why so many are storing up gold, eh?

reply to post by surrealist

Rising sovereign debt levels in advanced debt based economies are spawning a crisis that threatens to topple the dollar and other reserve currencies

I made a small correction to the above sentence. It's amazing how clear something can become when you describe it's true nature. How can debt ever stop growing when each dollar that comes into circulation represents a debt.

My first post! The economy is what everyone's been talking about for years, about a few after 9/11.

Lots of wealth was made on that day. Lots of paper money is being printed. Why?

To make the gold reserve worth more?

Originally posted by atsci
My first post! The economy is what everyone's been talking about for years, about a few after 9/11.

Lots of wealth was made on that day. Lots of paper money is being printed. Why?

To make the gold reserve worth more?

Lost of money isnt being printed. It really isnt happening. You need to stop beveling everything that the conspiracy sites tell you. Its okay to get an alternative point of view, but usually its not true. Especially in this case.

No country really uses gold as its only reserve or as its main reserve and many dont use it at all. Gold isnt the jesus metal you think it is.

Come again?????? I call 2 trillion printed in the last 4 years A LOT. Where do you think the 40 billion printed a month comes from????? You need to do some research.

reply to post by KoolerKing


They made an adjustment and they are actually printing $85bn a month now, was $40bn when QE infinity started and was called QE3, now I as well as many other gave it the infinity tag cause thats how long Benji seems to think its gonna be needed.

SaneThinking

It is already starting. In the UK things have been going on in the dark. Last month the Bank of England was in the process of some dealings.

"The Bank of England is prepared in principle to become the first G7 central bank to enter into a foreign exchange swap agreement with China, opening the door to another substantial step in moves to liberalise the yuan currency."

LONDON | Thu Jan 24, 2013 7:25pm GMT
REUTERS

Dont forget China is supposedly swooping up lots of gold, if it is for this purpose then... ideal for backing a yuan system, maybe....???

In my opinion bonds could blow up soon, they need to keep everyone believing there is little inflation so they buy these bonds.... having rising gold is bad for that fakery I guess although most people know prices are higher than official figures suggest. So... dilemma time I guess... is the yuan ready to rock n roll?

btw china are placing rockets on the coast towards the disputed islands...

oooo so many triggers are set around the world... crazy days (years) ahead...

Originally posted by gorgi

Lost of money isnt being printed. It really isnt happening. You need to stop beveling everything that the conspiracy sites tell you. Its okay to get an alternative point of view, but usually its not true. Especially in this case.

Qualify, "lots of money", please. There is most definitely a huge increase in the money supply, printed or not, circulated or stored. Eventually it will be realized as inflation, and a hidden tax on the people. This is easily verified as the truth. That means your statements are false.

No country really uses gold as its only reserve or as its main reserve and many dont use it at all. Gold isnt the jesus metal you think it is.

The western fiat currencies will fail, eventually. If you'd like to offer a more sound alternative after they fail, than gold and silver, we're listening.

Originally posted by KoolerKing
Come again?????? I call 2 trillion printed in the last 4 years A LOT. Where do you think the 40 billion printed a month comes from????? You need to do some research.

Its all relative. 40 billion sounds like a lot but the increase in the money supply isnt all that much. it makes small dents over time. Inflation is still below 2%. And please dont give me some weirdo number from a fringe site. it isnt legit.

Originally posted by nomnom

Qualify, "lots of money", please. There is most definitely a huge increase in the money supply, printed or not, circulated or stored. Eventually it will be realized as inflation, and a hidden tax on the people. This is easily verified as the truth. That means your statements are false.

Lots is much more than we are currently increasing it at now. The inflation rate is still low. Its below 2%.

The western fiat currencies will fail, eventually. If you'd like to offer a more sound alternative after they fail, than gold and silver, we're listening.

Ahhh, eventually. I like that. Care to give an estimate? Because as you stated, it sounds like you re saying between now and the disappearance of humans.
Why use shinny metals that are mined from the ground. They really dont have much value outside of what people decide to think that they are worth. Why not use an oil backed currency or iron (its a metal from the earth), or diamonds ect....

reply to post by gorgi


2% That's not even close to true.

Gold and silver are infinitely more valuable than fiat. They are physical, meaning they are limited, and have actual usage in the world. Each solar panel produced requires more than an ounce of silver. Most electronic devices contain silver.

You are uninformed.

reply to post by gorgi


The QE games should have devalued the dollar far more substantially than they did, but; we aren't done yet.
The numbers behind the whole thing indicate that we should already be reaching the kind of hyperinflation that occured in the Weimar Republic but we have a few things going for us that they didn't.

We are still the number one military power on the planet. That makes it tough to toss us around too much.
China has internal reasons to not wish to see our currency fail. We buy all of their stuff. If our currency fails we will not be able to afford it. Their exporting would tank which would do serious damage to their own economy. They also hold a tremendous amount of our currency. If it tanked they would lose a substantial amount of "perceived" wealth.

History clearly shows us that printing money eventually takes down the printer. Though I am well aware of that I have felt for a while that we are uniquely placed in history and that we, at this particular moment in time, might actually be in a position to do this and get away with it. The other players on the board have almost as much to lose from our sudden economic decline as we do. However, a moment in time is just that. A moment. We are pushing it.

The more time we give China to diversify their savings holdings, build up alternate markets both internally and in the developing/debt free world -- the more likely I find it that we could eventually see the type of hyperinflation that was a precursor to WWII. And, yes - government targets for annual inflation are currently holding - but if that levy is breached it will not be a slow build. We could experience all the backlash in a very short period of time.

But, then we have to ask if we care? If we actually use that time to build up:
Increased internal manufacturing base...which we are doing
Increased energy independence... which we have done and are still doing...

Then we could disassociate ourselves.
And a hostile relationship (be the war hot or cold) would mean we would be morally "justified" in refusing to pay...

They hold 8% of our debt.

How much is this whole sequestration fight over again???

Being an evil genius is not honorable, but on the nights when I think that's who is running the show for the western world, I may not have great national self esteem but I do feel safe and sleep well.

Originally posted by nomnom
reply to post by gorgi

 

2%

That's not even close to true.

Gold and silver are infinitely more valuable than fiat. They are physical, meaning they are limited, and have actual usage in the world. Each solar panel produced requires more than an ounce of silver. Most electronic devices contain silver.

You are uninformed.

There are a few industrial uses and thats it. Why base the money supply on how much and how fast you can get a shiny metal from the ground? We dont have an iron back money.
A lot of stuff is limited. Iron is, mercury, oil.....

reply to post by watcher3339


I agree with you on some of what you said. I dont think that we would still have a hyperinflation rate anyways, since we really arent expanding the money supply fast enough.

I dont see china diversifying anytime soon. there domestic consumption is still low and not improving. There is no alternative reserve currency. The euro is shaky and china has moved back to using dollars.

I don't quite understand why China (or even the U.S., for that matter) think that their currency is anymore perpetual and reliable than anyone else's. These international economist are speaking as if mere monetary and pricing issues are the big drivers and determiners of the global economy.They are important, of course, but ultimately demographic trends, banking/investment trends, local and governmental regulations, resource distributions/availability and environmental/geographic factors are the true determinants of economic strength at any particular space or time. Prices and monetary trickery merely reflect this reality and occasionally mask it for a period of time. If I was China or the United States, I would be more concerned with the future availability of energy-producing resources (such as oil, gas, or sunlight) than mere financial concerns. After all, energy is the true engine of an economy, not money or prices

Such small concerns we humans have...ah well.

Some sources: www.ktu.lt...
en.wikipedia.org...