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Forex: Euro Rallies with S&P 500 and DAX, but Why Not Above $1.34?	18:29 Daily FX
Forex: Gold Advances as Stocks Hit 5-Year Highs- Still at Risk Sub $1693	18:29 Daily FX
EU still a big challenge to China's economy	18:23 China Daily - BizChina
China's economy rebounds in Q4, 2012 weakest since 1999	18:22 Asahi Shimbun - Business
Forex: Australian Dollar May Struggle to Find Bid Despite Sticky Inflation	18:19 Daily FX
The Currency Wars: Now US Automakers Are Squealing	17:57 Zero Hedge
Bullish on Russel Metals	17:54 The Globe and Mail
Sheldon C. Good: NYT Magazine Article Misleads on Washington 'Economic Boom'	17:44 The Huffington Post - Media
Where to Put All That Gold	17:37 The Wall Street Journal - Europe Edition
Super Bowl 2013 reverberating through the New Orleans economy	17:34 Times-Picayune, Louisiana - Business
Photos: Monkey Research on the Silver River	17:34 Ocala Star Banner, Florida
Transcripts show Fed in '07 underestimated impact financial crisis would have on US economy	17:29 The Washington Post
French banks to begin repaying ECB loans	17:13 The Irish Times - Markets
Germany Tops Study on Euro Real Estate	17:07 Women's Wear Daily - Retail
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HDFC Bank's net profit rises by 30 pc to Rs 1,859 crore; retail grows, but treasury halved	16:48 The Economic Times
Lawmakers, development officials push Silver State's brand into foreign markets	16:43 Las Vegas Review-Journal
IMF chief: global economy not safe yet	16:41 The Daily Star, Lebanon
EMERGING MARKETS-Mexican peso sours on interest rate cut warning	16:41 Reuters - Economy
Japan's fiscal 2013 main budget to total record 93 trillion yen: Nikkei	16:37 Business Times Online - Asia
Bank of Italy sees gloom deepening for economy	16:35 Business Times Online - World
Asia Stocks Rise This Week on China, U.S. Data and Yen’s Slide	16:34 Bloomberg - Markets
Silver ETF Holdings See Massive Spike, U.S. Mint Runs Out Of Coins	16:26 SeekingAlpha - ETFs & Portfolio Strategy
China’s economy grows 7.8% in 2012, a 13-year low	16:17 The Times of India - International Business
US dollar slightly higher in quiet forex markets	16:14 Channel NewsAsia - Business
Forex: EUR/USD Keeps Above 1.3300, Is 1.3400 A Double Top?	16:11 SeekingAlpha - Macro View
LW Hospitality Advisors and Silver Hospitality Group Form Strategic Alliance	16:09 Yahoo! US - Business - Press Releases

Escalating Currency War Keeps Gold Underpinned

by Peter A. Grant

Jan 18, AM
(from USAGOLD.com) --

The BoJ continues to sabre rattle, with threats to scrap the 0.1% rate floor and unlimited asset purchases. The central bank is widely expected to ease further next week, but questions remain as to how aggressive that move might be, given the heightened pressure being exerted by PM Abe.

Abe has declared war on deflation. He wants to push inflation up to 2%, which is pretty much going to require the BoJ to significantly expand its asset purchases. Stated another way: As a means to reinvigorate the moribund economy, the goal is to drive the yen lower, making Japanese goods and services cheaper.

On these expectations, USD-JPY traded above 90.00 this week, levels last seen in June 2010. EUR-JPY pushed above 120.00 before moderating on Friday. And this is before the BoJ has even spooled up the printing press.

Koichi Hamada, an adviser to PM Abe, suggested that a drop in the yen to 95 or 100 was not a problem for Japan. Perhaps not for Japan, but this beggar thy neighbor competitive currency devaluation may well pose problems for other countries. The EU's Jean-Claude Juncker has already expressed concerns about the strength of the euro. "The euro foreign-exchange rate is dangerously high,” said Junker.

With the EU in recession as well, one has to wonder what the ECB might do to keep European export markets competitive. The ECB held rates steady last week, but they have room to ease further.

And what of the Fed? Our central bank is maintaining its super-accommodative policy stance, but could always escalate QE further. Certainly the current environment makes the concerns surrounding the perceived new found hawkishness among FOMC members that surfaced following the release of the December minutes, seem unfounded. I think the recent rebound in gold is largely attributable to the unwinding of these tightening expectations.

Philadelphia Fed President Charles Plosser has expressed concern about the escalating currency wars. Plosser said, "We don't want to get ourselves in a world where you have currency wars. Beggar-thy-neighbor polocies ... would not be healthy."

Alexei Ulyukayev, First Deputy Chairman of Russia's central bank, has also warned that the world is on the brink of a currency war. “Japan is weakening the yen and other countries may follow,” said Ulyukayev.

I've got news for Messrs. Plosser and Ulyukayev: We're over the brink and the currency war is underway. Even little ol' Costa Rica and Thailand have joined the fight.

According to a Bloomberg article on Thursday: "Costa Rica plans to reduce interest rates to discourage capital inflows after the colon reached the strongest in almost five years. Thailand’s baht retreated from a 17-month high today after Finance Minister Kittiratt Na-Ranong said the exchange rate is “not at a good level” and exporters will face difficulties should it strengthen further."

With the major fiat currencies of the world — and many of the minor ones as well — purposely being debased, countries with foreign exchange exposure (and that's all of them) are not surprisingly looking for alternatives. In this environment a hard currency, recognized internationally as a store of value should fare quite well. I'm talking of course about gold.

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Escalating Currency War Keeps Gold Underpinned