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SGM Metals: Bernanke 'Promises' QE3 Wont Cause a Global Currency War, Right!

World leaders are up in arms about the FEDs unlimited QE3 bank bailout & yet the American people could care less? The currency war will be devastating to everyone so Bernanke is doing his best to convince the world otherwise while he inflates the USD

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When did knowledge fall out of style? Money printing =devalued dollar =inflation
When did knowledge fall out of style? Money printing =devalued dollar =inflation
PRLog (Press Release) - Oct. 17, 2012 - The Financial Times reports: [ Ben Bernanke has launched a staunch defense of the US central bank’s aggressive monetary easing amid attacks on the policy from officials around the world.

The head of the Federal Reserve rounded on critics of the policy, which has prompted accusations that he has sparked a global “currency war” that risks destabilizing emerging market economies.

The Fed’s effort “not only helps strengthen the US economic recovery, but by boosting US spending & growth it has the effect of helping support the global economy as well”, Mr Bernanke said on the last day of International Monetary Fund annual meetings in Tokyo on Sunday. “It is not at all clear that accommodative policies in advanced economies impose net costs on emerging market economies,” he added.

The Fed has faced a barrage of criticism over its decision to expand its balance sheet by a potentially unlimited amount in an attempt to counter high unemployment in the US. Opponents contend that the Fed’s third round of quantitative easing – nicknamed QE3 – has triggered volatile capital inflows into emerging markets, leading to an appreciation of their exchange rates, weighing on trade, and creating threats to financial stability.

Guido Mantega, Brazil’s finance minister and one of the Fed’s most vociferous critics, on Saturday labeled the Fed’s ultra-loose monetary policy as “selfish”.

Both the Fed and the Bank of Japan have eased monetary policy in recent months. But Mr Bernanke’s counterpart at the BoJ, Masaaki Shirakawa, appeared far more concerned about the detrimental impact of easing on emerging markets.

Mr Shirakawa warned over the weekend of the “collateral damage” caused by an abundance of easy credit from developed markets to the rest of the world. “With the deepening of globalization, no responsible policymaker could now dismiss the cross-border spillovers & feedbacks of their policies,” he said.

The Fed & other advanced economy central banks have faced criticism from emerging markets for their policies.

The Fed has also come under attack closer to home. Some lawmakers in Congress have criticised the central bank’s response to the crisis, saying that it has strayed beyond its mandate & that its policies could provoke high inflation. In contrast, the BoJ has often found itself under pressure from lawmakers in Tokyo to step up its response to the country’s economic woes.]

So on one hand you have the head of the FED, Mr. Ben Bernanke, who is all about full throttle money printing & exporting the inflation to the world & the BOJ head Mr. Shirakawa who is forced to do the same to protect the Japanese currency, but only he is concerned regarding the consequences of flooding the world with trillions in new fiat paper money. The issue at hand is that while other sensible people are concerned over shocking the world with a flood of new dollars Bernanke has pushed them into a corner as they have no choice but to defend their currencies from dollar devaluation by doing more of the same. This is by definition a currency war.

From Wikipedia: {Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a particular currency falls so too does the real price of exports from the country. Imports become more expensive too, so domestic industry, and thus employment, receives a boost in demand both at home and abroad. However, the price increase in imports can harm citizens' purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries}

So on one hand you have the FED leading the charge to attempt to ‘Bailout the banks AGAIN to the tune of $40 BILLION every month for the foreseeable future, in hopes of recapitalizing the banks so they can supposedly begin to lend to the public again, which in turn will supposedly initiate a lending & therefor a spending wave that should help to eventually bring unemployment down. . . . .’ yeah right! Let’s for a moment leave the federal reserve fairy tale land & come back to the real world for a moment. What we really have here is nothing more than the FED attempting to funnel even more money into their banker alliances & a shoddy rouse to justify it. They are telling us for all intents & purposes: “Don’t worry, we are saturating our banking alliance with tens of trillions in free money you are on the hook for as a tax payer, but don’t worry, eventually they will lend it to you but for now they have to be spoiled & enriched at your expense & then you will get a crack at the money once its devalued”! And while you & I are awaiting that supposed day when we get to borrow at interest the dollars that have been milked for their value & are now toxic to hold, the bankers who have been rewarded with tens of trillions in free monies for their ridiculously wreckless economy crushing derivatives bubble will have triggered a global currency war & the game will change rapidly from that point.

The most dangerous part of this QE3 (there are plenty) is the damage it will cause as well as the arrogant assessment that it will do no harm. While the fed boss may be successful in hypnotizing the Americans at home, I can assure you that the rest of the world is not disillusioned by the the federal reserves snake charmer explanation of how flooding their economies with trillions of our dollars will some how now impact their exchange rates nor their export markets. Because the other monetary policy heads are not delusional about this strategy, nor the adverse impact of it on their economies at home, they will fight back to protect their export based economies & this will end up hurting the US consumer even more than simply QE3 alone. You MUST establish your “Currency War Insurance Policy” in physical gold & silver bullion now & begin to participate in the sound money debate. The other option is to simply play stupid & get chewed up in the currency war that will swallow unspeakable wealth when its all said & done. When recessions border on, or slip into, depression territory we begin to see Nationalistic policies begin to surface in order to “take care of our own at home” & this economic downturn will be no different. Recessions can morph into depressions, inflation can shift into hyperinflation, currency wars can morph into trade wars & trade wars can degrade into real wars. Remember that it is a far better strategy to PREPARE your portfolio ahead of time rather than waiting & attempting to REPAIR it once the damage has begun. Tick, tock.

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