ThatDamnGood
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Victim of the US like everyone else.
More and more people dun like the yankee every day.
I Don't Want Speculation, I Want Clear Investment | zero hedge
Lars Schall of MMnews was kind enough to provide yours truly and SmartKnowledgeU with the English translation of the German interview. Though I agree with many of Mr. Hellmeyer's views, I don't agree with all he has to say. For example, I disagree with Mr. Hellmeyer in that I expect dramatic rises in food prices in the Western world in the next several years whereas he does not. I do, however, agree with Mr. Hellmeyer in his assessment that gold and silver have a long way to run before talk of a bubble can even become realistic. The English translation below may not be perfect as English is not Mr. Schall's first language. In any event, the below still provides fascinating insight into a very knowledgeable German banker's views of our current global monetary meltdown as well as some well-formulated opinions of what lies ahead for our global economy.
Folker Hellmeyer, the chief analyst with the Bremer Landesbank, gives in an exclusive interview for chaostheorien.de his take on the so-called “Currency War” and China’s role as a stabilizing factor in the world economy. Moreover, he talks about the problem of high frequency trading, the development of oil prices and the ongoing rally in the precious metals markets: “Gold is not in a bubble, silver is not in a bubble, precious metals are in general terms not in a bubble.”
By Lars Schall
I Don't Want Speculation, I Want Clear Investment
Folker Hellmeyer, born 1961 in Hamburg, is a banking professional who started his career as foreign exchange trader with Deutsche Bank in Hamburg (1984 - 1987) and London (1988 - 1989). From 1990 to 1995 he worked as an OTC broker in the interbank foreign exchange market at Bierbaum & Co. GmbH & Co. OHG. In 1995 he went as a senior analyst to Landesbank Hessen-Thüringen GZ (Helaba) in Frankfurt. Since April 2002 he has been chief analyst with Bremer Landesbank, where he is responsible for the Foreign Exchange and Money Market Sales department.
In his book “Endlich Klartext” ("At last, clear text"), that was published in 2008 at the Finanzbuch Verlag in Munich, Hellmeyer takes a look behind the scenes of our financial system. His critical analysis provides the reader with an equally entertaining and informative insight into the U.S. financial system and its political background. The functions of the free market, the policy of the central and commercial banks and the role of rating agencies are critically examined and reviewed.
To what extent one can therefore still believe economic data from the United States? How can one look behind the veil of political correctness? What is the aim of the Plunge Protection Team? These are some of his questions. Hellmeyer is one of very few senior bankers in Germany who doesn't grow tired of reminding the public: “First the free market dies, then dies democracy."
A comprehensive interview in German, that Folker Hellmeyer gave chaostheorien.de in August 2009, can be found under the headline „Das Plunge Protection Team in Aktion“ (“The Plunge Protection Team in Action“
here:
Plunge Protection Team in Aktion - Interviews - chaostheorien.de
Mr. Hellmeyer, for quite some time there is a “Currency War“ going on – and by now it is reaching the mainstream press. Can you explain to us this development and how gold fits into the picture?
Yes, of course. First of all, we have to say that this "Currency War" topic has been chosen by the Western press and it comes out of the Western financial hemisphere. In that respect we have to check whether the currency war is in fact the "Currency War" which is presented in the media outlets. From my point of view the currency war is not led by China or other emerging market countries and I want to point this out in a very outspoken manner.
China has started revaluing the Renminbi in 2005, the revaluation of the Renminbi stands currently at 20 percent. Throughout the crisis this revaluation of the Renminbi was halted for very good reasons because the insecurity about the further development was very high and from June 2010 onwards we've seen again an appreciation of the Renminbi by 3.3 percent so far. If you extrapolate the latest pace since June 2010 on a yearly basis we get somewhere close to 6 percent per year. This is a substantial result in the first place.
Secondly, we have to bear in mind that China took over responsibility on a global frame in stabilizing the global economy and the world financial system. In relation to the GDP, China took on the biggest burden for reviving its economy and thus supporting the global economy. Then they were helping out Russia, Eastern Europe and also the euro-zone in the beginning of 2009 after the financial centers London and New York attacked Eastern Europe and in particular Russia. They were sending a front-up payment of roughly 100 billion dollars to Russia for future energy contracts.
Thirdly, in the year 2010 they were again on the side of the euro zone supporting the euro zone in the question of the budget deficit crisis. They were lending support to Greece, they were buying the euro down in the 1,20's. Again they were supportive regarding the functioning of the global financial system. So arguing that China is not taking responsibility for the world recovery is simply nonsense.
If we look at Japan we clearly have to state that the JPY value does not comply with the status of its economy. So the interventions we are seeing from Japan are very much in line with fundamentals. Also here I can't see a currency war.
If we talk about a currency war the initiator stands on the other side: the United States are starting QE2, which means swamping the market with dollar liquidity and this dollar liquidity indeed leads to revaluations of foreign currencies, in particular in the emerging markets, where you have comparatively small markets being unable to neutralize this extra liquidity without consequences, pushing up the value of their currencies to levels that don't comply with their real economies. In that respect, if there is any currency war going on, then it is a liquidity currency war led by the United States, endangering the recovery of the global economy, because it is able to blow bubbles on one hand and destabilizing emerging markets countries in their economic recovery on the other. If we talk about currency wars as I said the United States are at the center of starting this currency war rather than anybody else.
More and more people dun like the yankee every day.
I Don't Want Speculation, I Want Clear Investment | zero hedge
Lars Schall of MMnews was kind enough to provide yours truly and SmartKnowledgeU with the English translation of the German interview. Though I agree with many of Mr. Hellmeyer's views, I don't agree with all he has to say. For example, I disagree with Mr. Hellmeyer in that I expect dramatic rises in food prices in the Western world in the next several years whereas he does not. I do, however, agree with Mr. Hellmeyer in his assessment that gold and silver have a long way to run before talk of a bubble can even become realistic. The English translation below may not be perfect as English is not Mr. Schall's first language. In any event, the below still provides fascinating insight into a very knowledgeable German banker's views of our current global monetary meltdown as well as some well-formulated opinions of what lies ahead for our global economy.
Folker Hellmeyer, the chief analyst with the Bremer Landesbank, gives in an exclusive interview for chaostheorien.de his take on the so-called “Currency War” and China’s role as a stabilizing factor in the world economy. Moreover, he talks about the problem of high frequency trading, the development of oil prices and the ongoing rally in the precious metals markets: “Gold is not in a bubble, silver is not in a bubble, precious metals are in general terms not in a bubble.”
By Lars Schall
I Don't Want Speculation, I Want Clear Investment
Folker Hellmeyer, born 1961 in Hamburg, is a banking professional who started his career as foreign exchange trader with Deutsche Bank in Hamburg (1984 - 1987) and London (1988 - 1989). From 1990 to 1995 he worked as an OTC broker in the interbank foreign exchange market at Bierbaum & Co. GmbH & Co. OHG. In 1995 he went as a senior analyst to Landesbank Hessen-Thüringen GZ (Helaba) in Frankfurt. Since April 2002 he has been chief analyst with Bremer Landesbank, where he is responsible for the Foreign Exchange and Money Market Sales department.
In his book “Endlich Klartext” ("At last, clear text"), that was published in 2008 at the Finanzbuch Verlag in Munich, Hellmeyer takes a look behind the scenes of our financial system. His critical analysis provides the reader with an equally entertaining and informative insight into the U.S. financial system and its political background. The functions of the free market, the policy of the central and commercial banks and the role of rating agencies are critically examined and reviewed.
To what extent one can therefore still believe economic data from the United States? How can one look behind the veil of political correctness? What is the aim of the Plunge Protection Team? These are some of his questions. Hellmeyer is one of very few senior bankers in Germany who doesn't grow tired of reminding the public: “First the free market dies, then dies democracy."
A comprehensive interview in German, that Folker Hellmeyer gave chaostheorien.de in August 2009, can be found under the headline „Das Plunge Protection Team in Aktion“ (“The Plunge Protection Team in Action“
here:Plunge Protection Team in Aktion - Interviews - chaostheorien.de
Mr. Hellmeyer, for quite some time there is a “Currency War“ going on – and by now it is reaching the mainstream press. Can you explain to us this development and how gold fits into the picture?
Yes, of course. First of all, we have to say that this "Currency War" topic has been chosen by the Western press and it comes out of the Western financial hemisphere. In that respect we have to check whether the currency war is in fact the "Currency War" which is presented in the media outlets. From my point of view the currency war is not led by China or other emerging market countries and I want to point this out in a very outspoken manner.
China has started revaluing the Renminbi in 2005, the revaluation of the Renminbi stands currently at 20 percent. Throughout the crisis this revaluation of the Renminbi was halted for very good reasons because the insecurity about the further development was very high and from June 2010 onwards we've seen again an appreciation of the Renminbi by 3.3 percent so far. If you extrapolate the latest pace since June 2010 on a yearly basis we get somewhere close to 6 percent per year. This is a substantial result in the first place.
Secondly, we have to bear in mind that China took over responsibility on a global frame in stabilizing the global economy and the world financial system. In relation to the GDP, China took on the biggest burden for reviving its economy and thus supporting the global economy. Then they were helping out Russia, Eastern Europe and also the euro-zone in the beginning of 2009 after the financial centers London and New York attacked Eastern Europe and in particular Russia. They were sending a front-up payment of roughly 100 billion dollars to Russia for future energy contracts.
Thirdly, in the year 2010 they were again on the side of the euro zone supporting the euro zone in the question of the budget deficit crisis. They were lending support to Greece, they were buying the euro down in the 1,20's. Again they were supportive regarding the functioning of the global financial system. So arguing that China is not taking responsibility for the world recovery is simply nonsense.
If we look at Japan we clearly have to state that the JPY value does not comply with the status of its economy. So the interventions we are seeing from Japan are very much in line with fundamentals. Also here I can't see a currency war.
If we talk about a currency war the initiator stands on the other side: the United States are starting QE2, which means swamping the market with dollar liquidity and this dollar liquidity indeed leads to revaluations of foreign currencies, in particular in the emerging markets, where you have comparatively small markets being unable to neutralize this extra liquidity without consequences, pushing up the value of their currencies to levels that don't comply with their real economies. In that respect, if there is any currency war going on, then it is a liquidity currency war led by the United States, endangering the recovery of the global economy, because it is able to blow bubbles on one hand and destabilizing emerging markets countries in their economic recovery on the other. If we talk about currency wars as I said the United States are at the center of starting this currency war rather than anybody else.
