China "Fully Prepared" for Currency War

History shows us that first it's currency wars...which leads to trade wars....which leads to shooting wars.

Currency is the paper money that countries print.  It is really just pieces of paper with numbers and writing on it and is backed by the confidence the people put in the government that is printing the paper.

As we recently said, 100% of paper currency down through history has failed.  ALL OF THEM ultimately fail.  So will the U.S. Dollar...it is simply a matter of time.

Remember, countries will try and DEVALUE their paper money in hopes that it will make their products cheaper to foreign buyers and give their economy a jump start.  Maybe that WILL work, in the short term, but it almost always leads to inflation...since their is more paper out there chasing a the same amount of products.

China knows that IS THE GAME that many Western nations are playing and they have made $trillions of dollars in the past decade selling CHEAP products and they are NOT GOING to sit idly by while the other nations play a currency game.

AFP - A top Chinese banker said Beijing is "fully prepared" for a currency war as he urged the world to abide by a consensus reached by the G20 to avert confrontation, state media reported on Saturday.

Yi Gang, deputy governor of China's central bank, issued the call after G20 finance ministers last month moved to calm fears of a looming war on the currency markets at a meeting in Moscow.

Those fears have largely been fuelled by the recent steep decline in the Japanese yen, which critics have accused Tokyo of manipulating to give its manufacturers a competitive edge in key export markets over Asian rivals.

Yi said a currency war could be avoided if major countries observed the G20 consensus that monetary policy should primarily serve as a tool for domestic economy, the Xinhua report said.
But China "is fully prepared", he added.

"In terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries."

Here;  http://www.france24.com/en/20130302-china-fully-prepared-currency-war-banker-0

Please remember that China and Japan are already upset with each over their individual claims over some tiny islands...so a currency war could really pour salt on an already festering wound.

The nations are shaking....