Topic: Weidmann warns of currency war risk (Read 2428 times)

BILL GATES: The Global Currency War Is What's Causing Companies To Sit On Their Massive Piles Of Cash

While your example might have applied in the past (and this is in itself a morally charged debate), where is the value creation today in the age of crowdfunding & open everything?  What does he do that the crowd and an efficiently informed funding market cannot?

the problem with your answer is that it has made you and every honest banker out there believe that billion dollar deals are "normal" and that 100 million dollar paydays are "normal" for an investment banker deal.  that's ridiculous.  b/c of the systemic corruption from the fact that the banking industry in general has gotten hold of the printing presses in every country doesn't make huge payoffs for even the honest bankers sustainable or fair compared to the menial salaries for say what a doctor or lawyer make in comparison.  it used to be the other way around and i would argue those 2 professions create just as much or more value for their patients or clients as an investment banker.

this control of the money supply is precisely why a millionaire is no big deal anymore; a billionaire is the new "normal"; at least for a bankster.  even the honest ones.  those types of payoffs are unreachable for anyone else in society.

as to the part about what Vandroiy claims are transparent auctions?  talk to me about Libor manipulation.  it's a base rate that affects ALL other bond auctions and interest rates.  this corruption is what allows ALL bankers, honest or not, to make outrageous amounts of money on IB deals and whatnot.  

as i said before, no one else in society can attain those levels of income b/c they aren't inside this fraudulent system that allows them to borrow at 0% or get their bad highly speculative bond deals bailed out thru monetization.

I agree, what those "99%" attempt to do is no less theft than what the "too big to fail" bailouts were. But while its "morally wrong", our system allows both kinds of fraud to take place. So long as its done within the "legal framework", which is bribery of politicians (either financial lobbying, or with broad democratic support).

Financial industry should have better information about inflation and other economic events or they're not doing their job. They pay very high fees for supercomputers located within miliseconds latency from datacentres (such as the exchanges), thus their trading desk should have already processed/analysed and traded the "economic event" information before "Joe trading at home" even gets the news. But the fact that people claim this is an uneven game is ridiculous, trading was always an uneven game, the guys in the pit used to be the only ones playing "an even game", now those daytraders lost their jobs and the banking industry took over their "work". And there is nothing wrong making billions or even trillions, if an industry really pays that well then all the complainers would change profession.

Inter-country inflation competition, like ALL state projects isn't there to solve anything at all. It's there for states to have a GDP pissing show between each other every few years.

The point is, the state is the whore that is for sale to perform systemic-fraud (benefit the society, it's financial contributors and democratic majority). The price for these wonderful benefits ? You get it for free, the state just wants your childrens income.

+21,000,000

the problem with your answer is that it has made you and every honest banker out there believe that billion dollar deals are "normal" and that 100 million dollar paydays are "normal" for an investment banker deal.  that's ridiculous.  b/c of the systemic corruption from the fact that the banking industry in general has gotten hold of the printing presses in every country doesn't make huge payoffs for even the honest bankers sustainable or fair compared to the menial salaries for say what a doctor or lawyer make in comparison.  it used to be the other way around and i would argue those 2 professions create just as much or more value for their patients or clients as an investment banker.

this control of the money supply is precisely why a millionaire is no big deal anymore; a billionaire is the new "normal"; at least for a bankster.  even the honest ones.  those types of payoffs are unreachable for anyone else in society.

This is not responding to the point of my post.

There exist bankers who do produce enormous amounts of value. Take an investment banker who makes the correct decision as to where to allocate a billion dollars. Say the company he allocated it to has a production efficiency 30% above average, and any commonly available system would have selected a company with "just" normal efficiency.

The banker in effect created productivity equivalent to the value of 300.000.000 dollars! Even if he gets paid a hundred million for it, that's still a damn good deal for everyone.

We can go into detail as to why such things can happen and how often they should happen, but that's statistics and should not affect how we see the moral issue. It's also not something for anyone to judge on a whim; we'd need a rigorous model which nobody might have yet.

Again: please distinguish between bankers who just do their jobs and those who actually cheat their way to other peoples' money! Earning a lot of money does NOT equal being an evil person or being harmful to society, because trade and investment are NOT zero-sum games. People who don't make that distinction just aim for stealing from the wealthy and sharing the loot. That's immoral, and very damaging to society.

Just go hit on the central bankers who print too much money and even buy government debt with it. And on those who got ties to politics and take "bail-outs" tailored for their poor little special bank. THAT is immoral.

This is not responding to the point of my post.

There exist bankers who do produce enormous amounts of value. Take an investment banker who makes the correct decision as to where to allocate a billion dollars. Say the company he allocated it to has a production efficiency 30% above average, and any commonly available system would have selected a company with "just" normal efficiency.

The banker in effect created productivity equivalent to the value of 300.000.000 dollars! Even if he gets paid a hundred million for it, that's still a damn good deal for everyone.

We can go into detail as to why such things can happen and how often they should happen, but that's statistics and should not affect how we see the moral issue. It's also not something for anyone to judge on a whim; we'd need a rigorous model which nobody might have yet.

Again: please distinguish between bankers who just do their jobs and those who actually cheat their way to other peoples' money! Earning a lot of money does NOT equal being an evil person or being harmful to society, because trade and investment are NOT zero-sum games. People who don't make that distinction just aim for stealing from the wealthy and sharing the loot. That's immoral, and very damaging to society.

Just go hit on the central bankers who print too much money and even buy government debt with it. And on those who got ties to politics and take "bail-outs" tailored for their poor little special bank. THAT is immoral.

Given the amount of money they "earn" vs the amount of value they produce, it's ridiculous they havent been strung up in the streets decades ago. Ignorance of the masses is the only thing stopping this occurring today.

Why is it that everyone correctly talks about the wrongs of money printing and central banks, but then accuses all bankers in general?

Some of them are hard-working people doing a productive job. I'd prefer it if we keep the angry comments aimed at the ones who cheat by printing money, spreading misleading information or engaging in corruption. It might not be good to take a stance like "we are the 99%, so now we demand money from whoever has more of it than we do". I agree many rich people got their money through questionable means like constructing monopolies or lobbying with politics. Yet there are those who did no such things. They have a right to do whatever they want with whatever absurd sums they control -- because they earned that money in fair trade and that's that. (Also, history shows that punishing people for performing extraordinarily is no good strategy.)

The money supply is handled through transparent auctions in most places, so it's fair to say that "normal" bankers can predict inflation no better than any other trader. I don't see a fundamental flaw apart from the central banks' insane bond buying and excessive tendency toward inflation. The other problems stem from corruption and bureaucracy, so that's part of the more general problem of defunct politics.

And I don't get the inter-country inflation competition. How does that solve anything? People can export more to get devalued money in return? Great plan.

Also there is the advantage of being first to devalue for countries.

I came over an article a month or so ago, where Japan accused USA of breaching an unofficial "don't devalue first treaty".

Central baker's... now that's an idea I could support.  Free cake for everybody!

Yes, world currency war III is certainly possible.

Inflation briefly works, because the loosing part of the public does not understand what is going on. The cost is of course wealth redistribution and distortion of the labour and interest markets, making the population as such poorer than it would otherwise be. If it works on the national scale, it works even better internationally by distorting the import/export trade balances. It is a long way for the public in South Korea or Argentina to connect US or Japanese or Euro inflation (of the money supply) to their own misery.

The reason we have not had currency war continusly, is diverse agreements on the supernational level. A gentlemens agreement, or should I say an agreement between fellow scammers, in the form of unofficial central baker's dinners in Basel, has been effective lately, but seems to be in process of breaking up.

See Currency Wars: The Making of the Next Global Crisis, by James Rickards.

Radical? Sensible, you mean!

Sadly, I doubt we will be seeing too many employers paying out hard-money tax-free salaries any time soon. But you never know, they could secretly be doing it already.

This will sound a little radical , but people who work in private sector should really orginanise and demand either Gold or Bitcoins as payment from their employer.

Google cache

http://webcache.googleusercontent.com/search?q=cache:uD7crzhqFEoJ:www.ft.com/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html+&cd=3&hl=en&ct=clnk&gl=us#axzz2IjIf2j1z

(Financial Times) -- The erosion of central bank independence around the world threatens to unleash a round of competitive exchange rate devaluations, which leading economies have so far avoided during the financial crisis, the president of Germany's Bundesbank warned on Monday.
Jens Weidmann, whose institution's own fierce independence from political influence was the model for the European Central Bank when it was founded, said Stephen King, the chief economist at HSBC, was "perhaps right" in forecasting an end to the era of central bank independence.
"It is already possible to observe alarming infringements, for example in Hungary or in Japan, where the new government is massively involving itself in the affairs of the central bank, is emphatically demanding an even more aggressive monetary policy and is threatening an end to central bank autonomy," Mr Weidmann said in a speech in Frankfurt.
"Whether intended or not, one consequence could be the increased politicisation of the exchange rate," he said, according to a text of his speech provided by the Bundesbank. "Until now the international monetary system got through the crisis without competitive devaluations and I hope very much it stays that way."
Both the Bundesbank and later the ECB were founded on mandates that gave them wide powers and freedom from political interference in return for focusing solely on keeping inflation in check. Some observers argue that the ECB now faces a challenge if other central banks ditch their own inflation targets and act to lower exchange rates against the euro, making exports from the embattled eurozone economies less competitive.
Asked about the trend for central banks to look less at inflation-targeting and more at policy areas that affect exchange rates, Mario Draghi, president of the European Central Bank, said earlier this month that the exchange rate was very important "as far as growth and stability" were concerned but was not a policy target for the ECB.
He also noted that the Group of 20 leading industrial nations had pledged not to undertake competitive currency devaluations as such action undermines economic and financial stability.
Mr Weidmann said the period in the 1980s and 1990s during which central banks around the world had been made independent had heralded a period of "great moderation" during which inflation fell. But the outbreak of the financial crisis and the growing energy and raw materials demand from fast-growing economies had put rising prices back on the agenda and complicated the job of a central bank.
This had led to demands on central banks to support the financial system, stimulate the economy and lower government refinancing costs "or even secure the solvency of a state", he said. "Overloading central banks with tasks and expectations is however certainly not the correct path towards sustainably overcoming the crisis."
The Bundesbank chief, whose concerns about straying from orthodox monetary policy prompted him to vote against and campaign openly against Mr Draghi's unlimited bond-buying plan last year, concluded by quoting approvingly from an interview Mr Draghi gave to the Financial Times in December. Central banks could best defend their independence by narrowly interpreting their mandate, he said.

It won't let me read the article.  Post it here please! 

Saw this article linked from the Drudge Report, and thought some of you guys might be interested. Perhaps this attributes to the recent rise in BTC prices. I checked the difficulty chart, and this seems to be some sort of panic buying.

http://www.ft.com/intl/cms/s/0/d1d81962-63e7-11e2-b92c-00144feab49a.html#axzz2Ij3jqg21