Currency Wars Escalate: Russia Stockpiling Gold ▸ RESET

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Following the G7 “currency war” statement, Putin’s continued stockpiling of gold and Russia’s emergence as the world’s top gold buyer (with gold/fx reserves rising to 533.5 bln), we caught up w/ Vince Lanci of FMX Connect/ Cameron Hanover to get his interpretation of the G7 statement, as well as his take on the market’s reaction to currency war concerns, in this edition of “RESET”. According to Lanci, the wording of the G7 statement (cited in the video) was a rhetorical attempt at hiding their true intentions and deflecting from the fact that they will admittedly intervene as necessary in foreign exchange markets in order to decrease volatility, undermining the statement’s previously expressed support of free markets. According to Lanci, the markets saw through the semantics and reacted efficiently. Although Lanci does not believe that the G7 statement was solely directed at Japan (as has been asserted), he discusses Japan’s important role within the emerging currency wars. Lanci notes that the Japanese market has been deflated longest in terms of its currency & bond value, and now signs of inflation are beginning to surface, and Japan is in the lead. How does China fit into all of this? According to Lanci, a substantial percentage of China’s imported finished goods come from Japan, giving China an influential role in the economic recovery of a country that wishes to export itself out of a recession; complicating Japan’s recovery via export, however, are its recent altercations with China over the Senkaku Islands. Given the continued escalation of this territorial dispute, Lanci believes that the tension will pose problems for Japan’s export relationship with China, which will lead to inflation without recovery. Lanci also gives us his take on Russia and Putin’s stockpiling of gold, which has reportedly caused Russia to emerge as the largest buyer of gold within the last decade. The rumors circulating suggest that the cause is a new trading currency– find out what Vince Lanci thinks on this “Currency War” edition of “RESET”. Kitco News, February 13, 2013.

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