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Currency Wars: Something Big Is Happening In Venezuela

Feb. 8, 2013 10:15pm Becket Adams

“Are we on the verge of a currency war? TheBlaze asked last month.

At the time, we reported that Alexei Ulyukayev, first deputy chairman of Russia’s central bank, had accused Japan of leading the way in regard to “competitive devaluation.”

“Japan is weakening the yen and other countries may follow,” Ulyukayev warned in January, adding later that the world is headed for a “currency war.”

We also mentioned that Ulyukayev is not alone in his concern:

Luxembourg Prime Minister Jean-Claude Juncker recently noted the “dangerously high” value of the euro.
Norway and Sweden have expressed concern over currencies exchange-rates.
The Bank of Korea has threatened “an active response” to current rates.
Federal Reserve Bank of St. Louis President James Bullard said he’s “a little disturbed” by Japan’s actions and the risk of so-called “beggar-thy-neighbor” policies.
Bank of England Governor Mervyn King said week that he is worried “we’ll see the growth of actively managed exchange rates.”

But if Japan actively intervening to depress the yen has world bankers and financiers worried, wait until they get a load of Venezuela. Check out these Bloomberg headlines (via Zero Hedge):

VENEZUELA DEVALUES FROM 4.30 TO 6.30 BOLIVARS
VENEZUELA NEW CURRENCY BODY TO MANAGE DOLLAR INFLOWS
CARACAS CONSUMER PRICES ROSE 3.3% IN JAN.

“And that, ladies and gents of Caracas, is how you just lost 46% of your purchasing power, unless of course your fiat was in gold and silver, which just jumped by about 46 [percent],” the Hedge notes.

“And, in case there is confusion, this is in process, and coming soon to every ‘developed world’ banana republic near you,” the report adds.

Here’s a chart showing the remarkable devaluation of the Venezuelan Bolivar (VEF) when paired against the U.S. dollar:

Currency Wars: Something Big Is Happening In Venezuela

Courtesy ZH

Hey, wait a minute. What was that bit about gold, silver, and fiat? Oh, yeah, check out this list of the world’s gold holdings (hint: #15):

Anyway, “this is what happens to the nominal price of a stock market as currency wars escalate … how do those US investors who flooded Venezuela with cash feel now?” the Hedge asks.

Courtesy ZH

Follow Becket Adams (@BecketAdams) on Twitter

Featured image courtesy Getty Images.

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Comments (72)

DIgnified
Posted on February 9, 2013 at 1:56pm
Currency devaluation is the currency value in relation to foreign currencies. That is not depreciation or devaluation. Venez. gold backed currency is a threat to Zionist bankers scam. Same as iran, syria, libya…. We need to dump the fed and remove them from the country one way or another.

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- skunkbear
  Posted on February 9, 2013 at 7:48pm
  If people all over the world would understand how fractional reserve banking works Armageddon would occur tomorrow. But TPTB will continue the fraud and the sheeple will continue to follow… And Glenn Beck either has no clue or is a willing putz to the money changers.
  
  Report this comment
AnAmerican111
Posted on February 9, 2013 at 1:11pm
Special thanks to the moron’s that elected OBAMA!……
They will soon understand their fate and look back and wonder how they could have been so stupid to believe a word that a criminal like OBAMA spews!

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- AINT_SKEERT
  Posted on February 9, 2013 at 2:17pm
  They will just find something else to blame it on, I’ve seen it hundreds of times by now.
  
  Report this comment
- BenzinVasser
  Posted on February 9, 2013 at 4:17pm
  AnAmerican: I don’t think they’ll look back and wonder what or why they voted or supported Obama. Like my ignorant father, he believed he was broke in the early 80′s because of Reagan, not Carter, Reagan happened to in office when his financial life fell apart. He couldn’t get it out of his head that Carter was responsible for anything, because he was a Democrat, even though during Reagan’s 2nd term the economy boomed. I truly believe that Democrats lack any logical reasoning, well the ones that aren’t just plain evil. If Obama can hold it together and keep his effects on the economy somewhere where it is (which isn’t good, but free phones) and a Republican comes into office and the country goes down the poop shoot, the Republican again will be blamed by the ignorant Americans that do not follow or study anything except sports and soap opera’s, and their “FREE PHONES”. This country creates more morons everyday, instead of intelligent individuals, I think the idiots are out breeding the intelligent people 10 to 1. That means eventually, we will get Obama’s in office every time, well, as long as they can get them on the street to vote. They’ll just have to up it to 2 free hones with unlimited minutes.
  
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UNALIEN
Posted on February 9, 2013 at 11:29am
“Everyone loves an early inflation. The effects at the beginning of an inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular general prosperity, all in the midst of temporarily stable prices. Everyone benefits, and no one pays. That is the early part of the cycle. In the later inflation, on the other hand, the effects are all bad. The government may steadily increase the money inflation in order to stave off the later effects, but the later effects patiently wait. In the terminal inflation, there is faltering prosperity, tightness of money, falling stock markets, rising taxes, still larger government deficits, and still roaring money expansion, now accompanied by soaring prices and ineffectiveness of all traditional remedies. Everyone pays and no one benefits. That is the full cycle of every inflation.”

— Dying of Money: Lessons of the Great German and American Inflations, Jens O. Parsson, 1974

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- 50calgunner
  Posted on February 9, 2013 at 7:34pm
  Any one with half a brain that reads that should know where we are in that cycle. Think stuff is expensive now just wait!
  
  Report this comment
rdk
Posted on February 9, 2013 at 10:49am
So if every country devalues its currency, what will happen?

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- UNALIEN
  Posted on February 9, 2013 at 11:01am
  everyone gets poorer and inflation goes ballistic
  
  the real reason to devalue is to import inflation and reduce your debt, central banks and governments want inflation
  
  Report this comment
- tharpdevenport
  Posted on February 10, 2013 at 9:52am
  Your kids will ahved new toys to play with (called the “dollar”) and you’ll have a new wheeled vehicle: a wheelbarrow.
  
  Report this comment
- signal_lost
  Posted on February 10, 2013 at 2:00pm
  There is a saying among nurses in hospitals, “If everything is stat, nothing is stat.” Translated here to if everything is devalued then nothing is devalued and you’re right back to the problem you were trying to fix. But now you’re without crash carts…
  
  Report this comment
JacquesChirac
Posted on February 9, 2013 at 9:49am
Wait, wait, wait…I don’t understand…Sean Penn and Danny Glover have “visited” Venezuela and told us – ad nauseum – that Hugo Chavez really does it right in Venezuela, and since they are THE authorities on life around the world, why should I even be concerned about Venezuela devaluing its currency???

Folks, c’mon – pls quit sending the confusing messages that run counter to what Sean and Danny have been telling us for years. Sheese!

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- just the facts
  Posted on February 9, 2013 at 10:36am
  All smoke and mirriors people. This so called currency war is and has been just another method that will be used as a means of going to a ‘one world government’ which again has not a ‘world leader’ but rather a means to control all currency once all currency has been equalized and revamped. The banking institution is in place for this.
  
  Devaluation of the American dollar must occur for this to happen and between this idiot in the White House, who really isn’t an idiot per say but a skilled socialist, and the ‘socialist/communist’ governments around the world, those combined is forcing a weakening of our dollar and a step or two closer to the ‘answer’, which in this case the formation of that one world currency.
  
  We are not as far away from this as one thinks. Do not second guess this, we will become part of a one world currency rather soon. And we re-elected this radical as president to continue to prep the U.S. for this. Thank you all who elected this dictator. You all, actually we all will see our demise first hand.
  
  Report this comment
- Cargoman
  Posted on February 9, 2013 at 10:43am
  I think they may have a thing going on.
  
  Report this comment
- UNALIEN
  Posted on February 9, 2013 at 10:50am
  JUST THE FACTS
  
  true a global debt instrument is the end game, but it isn’t easy, like herding cats, there are world superpowers positioning for dominance
  
  Report this comment
- piiguissa
  Posted on February 9, 2013 at 2:39pm
  @ just the facts:
  I don’t think there anything we can do about it… is happening and I think is too late!
  
  Report this comment
CatherineAnn
Posted on February 9, 2013 at 9:27am
Keep those food reserves up. Food will be currency.

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TRILO
Posted on February 9, 2013 at 8:36am
New currency war? How about the continuation of the existing currency war that the US has been participating in over the past 5-6 years. QE to infinity is just another form of devaluing the dollar. The world central banks have been playing a very dangerous game and the cat will soon eat the mouse and all hell will break loose.

The businessinsider.com recently reported that an unknown trader has just placed a $11 million bet against the US that expires in April. Does this(these) people know something the sheeple do not?

Go back to sleep and count your little sheep because soon that will be all you have left to count as the value of your cash will soon evaporate. Poof!

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- KidCharlemagne
  Posted on February 9, 2013 at 10:12am
  TRILO
  Posted on February 9, 2013 at 8:36am
  
  New currency war? How about the continuation of the existing currency war that the US has been participating in over the past 5-6 years.
  ===========================
  
  The currency war has been going on a lot longer than just 5 – 6 years though:
  
  The Nixon Shock, August 15, 1971
  
  Once the link to gold was severed for good, then the world entered a cyclical race to see who could devalue their bank notes by the most (without destroying their domestic economy, of course).
  
  This probably explains the pronounced spike in the price of gold over the past 4 years……folks get tired of watching the circular currency war going on around them, so they exit the fracas and trade in their bank notes for something that they absolutely know will always retain most of its value no matter what.
  
  It’s scary to think that central banks around the world are probably carrying the vast majority of their economies squarely on their shoulders.
  
  Report this comment
- UNALIEN
  Posted on February 9, 2013 at 10:40am
  So true, currency wars have gone on as long as international trade, but this one is just ramping up and it is going to be massive likely bleeding into a global military war where everybody loses … except the wealthy parasitic class..
  
  at least the Progressives will get to see what they created… chaos, misery, devastation and wealth destruction..
  
  Governments and Banks make move to control private retirement accounts… WATCH THIS ONE
  
  Retirement Savings Accounts Draw U.S. Consumer Bureau Attentionhttp://www.bloomberg.com/news/2013-01-18/retirement-savings-accounts-draw-u-s-consumer-bureau-attention.html
  
  Fascism doesn’t repeat but it sure does rhyme…
  UNALIEN
  
  Report this comment
- UNALIEN
  Posted on February 9, 2013 at 10:48am
  correction..
  
  Retirement Savings Accounts Draw U.S. Consumer Bureau Attention
  
  http://www.bloomberg.com/news/2013-01-18/retirement-savings-accounts-draw-u-s-consumer-bureau-attention.html
  
  Report this comment
cloudsofwar
Posted on February 9, 2013 at 7:41am
the currency wars. the start of WW3? as currencies fall unrest will fill in the void. then nations will eye other nations too see what they can take from them. it will most likely start in europe just like WW1 and WW2. peoples will say it’s time to even old scores. this is right up obama’s alley. we could have a civil war here. i sure hope not.

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- Kumo
  Posted on February 9, 2013 at 8:40am
  Look for an armed conflict to erupt between Israel and Iran soon. When that happens, watch many of the other nations in the region begin to pick a side. It really does look like we are headed to war again and let’s hope it does not go nuclear.
  
  Report this comment
- stablepar
  Posted on February 9, 2013 at 2:56pm
  you hope it doesn’t go nuclear??? hope i didn’t wake you up. it seems like you have a pretty good dream going
  
  Report this comment
NoMoMrNiceGuy
Posted on February 9, 2013 at 7:26am
This has to be one of the best roller coaster rides I have had the privilege to experience. More huge drops and loop-d-doops than a guy could hope for. Hang on Kids it is going to get bumpy.

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GuruMeditation
Posted on February 9, 2013 at 6:47am
Currency manipulation is evil.

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BehindBlueEyes
Posted on February 9, 2013 at 6:32am
Didn’t Obama’s boss Mr. Soros say that there needed to be a “managed” decline in the U.S. dollar in preparation for his new world order? Isn’t that currency manipulation at our expense?
Obama forgot to mention that his “fundamental transformation of America” is to transform America into a banana republic.

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- Fubared
  Posted on February 9, 2013 at 10:11am
  Soros is a nazi like you Jihad Jerk. Way to work that into a piece about Venezuela. Classy nazi.
  
  Report this comment
- BehindBlueEyes
  Posted on February 9, 2013 at 5:06pm
  @FUBARED
  Have you been making model planes?
  
  Report this comment
AbrahamsSheepdog
Posted on February 9, 2013 at 2:16am
And obamacare fines are coming.

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- AbrahamsSheepdog
  Posted on February 9, 2013 at 3:02am
  Where did Gaddafi’s gold end up? I’m sure not all still burried in sand.
  
  Report this comment
Kinnison
Posted on February 9, 2013 at 1:45am
Please note that there has never been an independent physical inventory of the U.S.’ gold reserves, much of which is held in Federal Reserve Bank vaults.

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- AbrahamsSheepdog
  Posted on February 9, 2013 at 2:01am
  Under the twin towers. That was a good place. Gintner just recounted gold 9 months ago. I hope it was all there.
  
  Report this comment
- Chuck Stein
  Posted on February 9, 2013 at 2:01am
  Gold, tungsten, whatever.
  
  Report this comment
TSUNAMI_22
Posted on February 9, 2013 at 1:31am
So which will win the race first; disarming America before the collapse, or the collapse before the disarmament of Americans?

I’m betting that the Fed can’t hold off the collapse with artificiality for much longer.

Prepare for war.

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- cloudsofwar
  Posted on February 9, 2013 at 7:34am
  so which will happen first disarming the citizens first or arming our enemies first. more weapons to the mus bro’s while our leaders talk about taking our guns away. why is it the law abiding gun owner is at the root of the so called gun problem? so say the progressives.
  
  Report this comment
- TJ Jackson
  Posted on February 9, 2013 at 2:56pm
  You are so correct. I also feel that the collapse will come sooner than the social breakdown. Remember, The future belongs to the prepared…
  
  Report this comment
showmerancher
Posted on February 9, 2013 at 1:14am
Now add this to the stories from CNBC yesterday about how the Fed bought up more in bonds in January than the Treasury issued and you’ll see that people are starting to divest themselves of our debt and the Fed had to buy it to keep the interest low.

Another story is about how a billionaire bond investor is now shorting U.S. bonds… a REALLY bad sign.

Japan’s finance minister has said that Japan will be printing “infinite” money.

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UNALIEN
Posted on February 8, 2013 at 11:36pm
Add Vietnam to the list..

Vietnam Must Tackle Inflation After Dong’s Devaluation, IMF, Citigroup Say

http://www.bloomberg.com/news/2011-02-11/vietnam-s-record-devaluation-adds-urgency-for-action-on-prices-imf-says.html

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KidCharlemagne
Posted on February 8, 2013 at 11:22pm
But wait……there’s more from ZeroHedge:

ZeroHedge (Oct. 5, 2012): “Gold And Triffin’s Dilemma”

Because the US dollar is the world’s reserve currency, then the whole national debt thing is a bit of a hoax….

If we don’t supply the world with dollars (a dollar = a Federal Reserve Note = “a promise to pay” = 1 unit of debt), then the rest of the world shuts down……

So how do we supply the world with dollars though?….

The only way to create more dollars (debt) is to run annual budget deficits…

However, this is the point at which Triffin’s Dilemma materializes and the whole thing starts to unravel.

Obviously, this is bad news and conditions could conceivably escalate tensions beyond just a currency war (in fact it may have already happened).

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- UNALIEN
  Posted on February 8, 2013 at 11:33pm
  excellent, Triffin’s Dilemma or Paradox is one my personal favourites..
  
  The US reduces the debt expansion,, a deflationary global collapse..
  
  The US continues to expand the debt, a hyper-inflationary collapse..
  
  and Governments always choose debt expansion… and devaluation
  
  The global warming scam was a strategy to use a manufactured crisis to create a new global carbon based debt, a continuation of the debt ponzi scheme…
  
  Report this comment
- spfoam1
  Posted on February 9, 2013 at 12:27am
  That is very interesting……Thanks for that link. This really looks like gas on a fire.
  
  Report this comment
- Fubared
  Posted on February 9, 2013 at 8:44am
  http://www.zerohedge.com/contributed/2013-02-08/currency-wars-often-lead-trade-wars-which-turn-can-devolve-hot-wars
  
  Report this comment
- nonofmybiznez
  Posted on February 10, 2013 at 6:47pm
  That’s all gonna change. Have you seen these articles? http://www.canadafreepress.com/index.php/article/52005 or this one? http://www.canadafreepress.com/index.php/article/52923?fb_action_ids=10152534178070076&fb_action_types=og.likes&fb_ref=.UReRiIvpu6U.like&fb_source=aggregation&fb_aggregation_id=288381481237582
  
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The_Almighty_Creestof
Posted on February 8, 2013 at 11:18pm
I feel bad for the people who have bought gold on paper only…or those cute little ingots, or those cute designer coins…history will repeat itself and the government will take it away. Hopefully they will once again not take old, collectible coins with some intrinsic worth other than the gold it contains.

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- chazmo
  Posted on February 8, 2013 at 11:27pm
  They will get my Gold and Silver and Guns when they dredge it from the bottom of the lake.
  Or pry it from my Cold Dead Hands…
  
  Report this comment
The-Monk
Posted on February 8, 2013 at 11:03pm
All that Gold adds up to about $1.2T. (That’s 1 point 2)

That might put our $16.5T debt into perspective for some of the trolls….

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- UNALIEN
  Posted on February 8, 2013 at 11:25pm
  is the all the gold there and what is left has probably been rehypothecated,,
  
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- chazmo
  Posted on February 8, 2013 at 11:25pm
  I came up with 416 Billion.. But I suck with math. I could be totally off here..
  8113tx32000oz = 260 million Oz of Gold
  260mx$1600= 416 Billion
  
  We are more screwed than we think..
  
  Report this comment
- chazmo
  Posted on February 8, 2013 at 11:31pm
  oh wait you were counting all the Gold. Not just the US gold.. :) my bad.. I don’t believe we have 8000 tons.. if we did why is it going to take 10 years for Germany to get their measly 150t of Gold from the Fed? Lies Lies Lies
  
  Report this comment
- Beachmastermax
  Posted on February 10, 2013 at 8:26pm
  That just tells you what gold is actually worth. When there is zero confidence in paper, it reverts to hard commodities. Since gold and silver can be transfered rather easily (IN A POCKET) AND IT IS TRUSTWORTHY, it will replace all currency. As currency goes to zero, Gold goes to the moon.
  
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zetuff
Posted on February 8, 2013 at 10:47pm
THIS is another reason to disarm America….they know [ the government] we are coming to get them when the dollar collapse.they are scared to death!!!!!

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- bo1921
  Posted on February 9, 2013 at 8:58am
  We’ll make good use of light poles when the time comes.
  
  Report this comment
soybomb315_II
Posted on February 8, 2013 at 10:39pm
we will talk about how other countries are devaluing their currency – but we are the biggest money printers in the world. If we werent the reserve currency of the world – we would have weimer republic inflation right now

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- gyro
  Posted on February 8, 2013 at 10:44pm
  this is corect
  
  Report this comment
- RJJinGadsden
  Posted on February 8, 2013 at 10:50pm
  SOY, I find myself in total agreement with yet again tonight. Better to invest in wheelbarrows before they also become un-affordable so that you can go to a grocer to buy a bag of sugar. That is even if it is in the store by then.
  
  Report this comment
- UNALIEN
  Posted on February 8, 2013 at 11:21pm
  yup, devaluation the only path out of debt and the US has the advantage of the Global reserve status, but that won’t stop it, a stronger dollar expands the debt obligations..
  
  This is why it is a war,, each debtor nation will competitively devalue its currency to gain an advantage, even the US, a race to the bottom but it is the poor and middle class get robbed.
  
  When currencies devalue against each other they don’t gain, eventually they will be devaluing against real money, gold..
  
  Report this comment
- chazmo
  Posted on February 8, 2013 at 11:32pm
  Yes indeed…
  
  Report this comment
- Fubared
  Posted on February 9, 2013 at 10:14am
  Soy you better get your non-hybrid pot seed collection going asap. Is there an Amish recipe for Cheetos to keep you going through the skinny times?
  
  Report this comment
Darmok and Jalad at Tanagra
Posted on February 8, 2013 at 10:39pm
I have been investing in Lead Bullion, it’s value seems to be going up everyday.

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- Twobyfour
  Posted on February 10, 2013 at 12:01am
  Right. You can always transmute it to gold.
  
  Report this comment
gyro
Posted on February 8, 2013 at 10:27pm
The canadian dollar has been droping all week it is just below par today

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media-bias-steals-elections
Posted on February 8, 2013 at 10:26pm
In 2009, when the US changed the Consumer Price Index, what securities were affected, that are tied in value to that rate? In other words, what securities can you borrow against, that base future profits on the Consumer Price Index, which is part of the regulatory process for securities?

If you keep the Consumer Price Index artificially low (remove gas and food prices), does that not tell you that any security (investment) product that projects stability based on guaranteed returns related to the Consumer Price Index, are based on an illusion, you are going to have large scale defaults just like you had large scale defaults to AIG, and you are NOT going to have George Bush to blame?

Watch out for people attempting to bundle these products and selling them?

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- chazmo
  Posted on February 8, 2013 at 11:53pm
  Not to mention artificially keeping the CPI low means our grandma’s and grandpa’s(or in my case Dad and Mom) don’t get COLA’s on their SS… As the dollar devalues and REAL inflation is hitting us, granny is getting hosed. Only good thing is PM’s go to the MOON as well as all commodities… Include the rigged stock market.
  
  Report this comment
mash4077
Posted on February 8, 2013 at 10:24pm
they are devaluing their currency once again. I know, shocker. and this is the model society comrade penn would have us emulate and the end result of el presidente baboona’s “policies”.next is europe, then us. just like it did back in the 30′s. stupid socialists repeating the failed policies of the past.

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- chazmo
  Posted on February 8, 2013 at 11:55pm
  Ya left out Japan
  
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