China "Fully Prepared for Currency War" Says China's Central Bank ...

Given the world's central bankers are already in a currency war, a policy statement made by a deputy-governor of China's central bank should not come as a surprise (except for the fact it was publicly and bluntly stated).

Please consider China well-prepared for currency war: official.

China is fully prepared for a looming currency war should it, though "avoidable," really happen, said China's central bank deputy governor Yi Gang late Friday.

A currency war could be avoided, Yi said, if policymakers in major countries observed the consensus, reached at the recent G20 meeting, that monetary policy should primarily serve as a tool for domestic economy.

"China is fully prepared," Yi said. "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."

Nonsense Over Domestic Tools

Yi's statements raise as many questions as they answer. Was the big finger-point at Japan the US, or both?

And what does "fully prepared" mean other than print like mad to infinity? It can hardly mean anything else, but given the US and Japan are already conducting QE like mad (with no exit policy), is the statement an immediate warning?

Look at the fuzziness of Yi's statement "monetary policy should primarily serve as a tool for domestic economy." Isn't that exactly what Japan and the US claim right now?

I ask "what difference does it make?" Indeed, isn't the domestic economy always the reason (albeit severely misguided) for currency debasement?

Debasement turns into "war" as soon as multiple countries are involved.

And that of course is where things are already. Thus, the statements by Yi are perhaps an indication the already ongoing war is about to escalate.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Source: http://townhall.com/columnists/mikeshedlock/2013/03/03/china-fully-prepared-for-currency-war-says-chinas-central-bank-deputy-governor-n1524750

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