Goldman Sachs Says The World War On Money Is Heating Up Again, Vigilance Five, Economic Phenomenon.

< p > November 12th morning news, the media on Monday comprehensive article pointed out that New York Mellon bank's foreign exchange trading strategist Neal Mailer (Neil Mellor) in the latest report pointed out, "we are seeing a new era of currency war."

Bloomberg also agreed with a report entitled "Bank of China bankers looking for a bottom competition again", and said that "global a href=" http://sjfzxm.com/news/index_s.asp "currency war < /a > is heating up again, and the central banks are planning a new round of easing measures to combat the slowdown in economic growth.

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According to the report by Bloomberg, "the European Central Bank announced last week that it should reduce the key" a href= "http://sjfzxm.com/news/index_cj.as" interest rate < /a ". Some investors believe that the decision is partly to suppress the euro exchange rate that soared to its highest point since 2011.

On the same day, Czech policymakers said they were implementing the first foreign exchange market intervention in 11 years to suppress the krona exchange rate.

New Zealand says it may delay interest rates and decide to drag down the New Zealand dollar; the Australian Central Bank warned that the exchange rate of the Australian dollar has been "unsettling".

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< p > analysis shows that most of the content of Bloomberg's report is accurate, but there is a fundamental mistake: the currency war has never been over heated, but the liquidity tsunami brought by the large scale easing of the BoJ has caused the whole world to gasp for a few months without erupting.

Now, the world meets every month with a new capital flow of 200 billion < a href= "http://sjfzxm.com/news/index_c.asp" > US dollar < /a >, and if China adds new loans every month, the figure will be larger.

In the process of sustained global liquidity soaring, Global trade continues to shrink and people can only squeeze a tiny profit in it. The central banks are coming back to do what they are only good at - printing money.

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< p > > a href= "http://sjfzxm.com/news/index_c.asp" > Goldman Sachs Group < /a > in the latest report, it lists the five important points that need to be paid attention to when the central bank's beggar thy neighbour policy has never been seen before: < /p >

< p > < strong > need to pay attention to sudden changes in policy: < /strong > /p >

< p > stability is achieved by counteracting forces, and sudden changes in one group of forces may lead to rapid reactions.

Such changes are usually the result of major policy changes, such as the one year ago in Japan, and the weakness of the pound in the early 2013 is another example of the central bank's sudden increase in interest rates.

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< p > < strong > pay attention to the real appreciation trend: < /strong > /p >

P: in a world where every country wants to prevent its currency from becoming stronger, those countries that really want a stronger currency will not face too much offset pressure.

Obviously, this is based on a stronger foundation.

In order to control the rate of appreciation, regular intervention may be necessary.

This will create a relatively slow appreciation scenario, accompanied by very low volatility, which will in turn form a high SHARP ratio.

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< p > < strong > attention to policy restrictions: < /strong > /p >

< p > there are still some countries which are facing the pressure of continuous appreciation. However, under the restriction of policy, they can not make a complete response to this.

Under such circumstances, policymakers will not be able to prevent the appreciation altogether.

These restrictions may take many forms. If the inflation rate is higher, can the European Central Bank also announce the interest rate cut? Strict inflation liability will reduce the flexibility of policymakers to respond to monetary movements, especially if this will bring a positive impact on growth.

Other external policy pressures are also a restriction: the position of G7 group is to restrict the Central Bank of Japan to continue to suppress the yen, and may also be a limiting factor when the yen appreciates again.

The US Treasury's latest report clearly implies this direction.

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< p > < strong > concern a href= "http://sjfzxm.com/news/index_s.asp" > foreign exchange market < /a > arbitrage paction: < /strong > /p >

< p > if policymakers decide to anchor the nominal value of the interest rate and succeed, that is not to say that there is no chance of return.

As long as there are differences in interest rates, there are opportunities for arbitrage.

At the same time, low volatility will even become a popular factor because of the increased SHARP ratio.

Under such circumstances, how much longer will the Bank of Australia stay in patience with the other developed countries for more than 2% interest rates? < /p >

< p > < strong > focus on quasi currency: < /strong > /p >

< p > there is a saying that competitive currency devaluation may cause precious metals to be sought after.

The source of this view is that a href= "http://sjfzxm.com/news/index_cj.as" > Gold < /a > is a currency without family ownership, and no central bank will impede its appreciation.

In other words, many asset prices may rise to respond to sustained competitive monetary easing, which is also an important feature of this non cooperative exchange rate regime.

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