Race To Devalue Across The Globe

The race to devalue fiat remains unperturbed across the globe. Chile, following Venezuela's decision and logic, has moved to weaken the peso against the dollar to 'help' exports. If policy ‘cause and effect’ were that easy… Paper gold, nevertheless, continues to be hammered under pretense of headline fear and doubt despite the secular trends. The rally will resume when as many contracts as possible have been repositioned at the expense of the weak hands.

Headline: Chile Central Bank to Buy $12 Billion to Stem Peso's Region-Beating Rally

Chile’s central bank plans to buy $12 billion of U.S. dollars to help exporters by weakening the peso, Latin America’s best-performing currency last year.

The bank will buy $50 million a day from Jan. 5 to Feb. 9 and will announce further plans later. The move will boost international reserves to the equivalent of 17 percent of gross domestic product, the bank said today in a statement. The bank will sell bonds to drain the equivalent amount of cash from the economy.

Source: bloomberg.com