@Wadda Podda After the 2000 crisis, the rupee appreciated from around 100 to lower 1990s until the Rata Perata energy manipulation and money printing fiasco in 2004.

The rupee also appreciated after the 2009 balance of payments crisis. When the currency was floated in April 2009 to get IMF funding, the rupee fell to 120. Post the current crisis the the rupee has appreciated from 134 something to 128 something. So far.

@fuss. I like that one about the 'the rupee will however stop appreciating'. Since when has the rupee appreciated and against which currency. If ever, it was that some currencies that lost value internationally and not that the rupee appreciated. It's easy to see why with sort of arguments that Sri Lanka has become the Wonder of Asia

@Gihan
You are welcome. We are unlikely to go into a balance of payments crisis now since there is no fixed peg that we are defending.

The rupee can however stop appreciating, (unless there is an increase in real money demand).

An isolated 8.0 billion rupee injection of money could probably be taken care of with a 50 cent or one rupee adjustment to the exchange rate.

Hi Nalliah,
A few points against the demonizing of the Jewish minority and the horrific nationalism displayed in these writings.

Germany managed to get into hyperinflation again towards the end of WWII with no help from the hated 'Zionist' minority.

Monetary history shows that private banks in general had a better record, most probably because their activities were easily questioned by the public and parliament. Also they lost gold when too much money was printed.

Private banks seem to have been better than politicians who had gained control of the post-feudal monetary and tax systems pretending to work for the betterment of the people.

Examples include Bank of England the pound's decline since the 1914 outbreak of war (and concurrent suspension of the gold convertibility) came with the British Treasury printing notes in addition to the bank during WWI. The paper of Reserve Bank of India money was used as far as the Middle East when it was privately owned. It lost value only after RBI was nationalised. The Fed was a semi-state state bank from its inception and created the great depression within 15 years of its existence, a feat that the 'Zionist' free bankers (Rothschild, Morgan et all) had not been able to achieve in America during the previous one and a half centuries.

If Germany should not pay reparations to its victims for its aggressive nationalism, who should? The victims themselves?

Research by Mises and others showed that the story of German war reparations was bogus. The net borrowings of Germany in the period of war reparations were higher than the payments. Germany in fact had paid very little before stopping altogether.

To quote Mises: "From September, 1924, until July, 1931, Germany paid as reparations under the Dawes and Young plans 10,821 million Reichsmarks. Then the payments stopped altogether. Against this outflow Germany’s private and public indebtedness abroad, most of which originated in the same period, amounted to something over 20,500 million Reichsmarks. To this may be added approximately 5,000 million Reichsmarks of direct foreign investments in Germany. It is obvious that Germany did not suffer from lack of capital. If any more proof were needed it may be found in the fact that Germany invested in the same period approximately 10,000 million Reichsmarks abroad.

The reparations were not responsible for Germany’s economic distress. But if the Allies had insisted on their payment, they would have seriously hampered Germany’s rearmament.

"The antireparations campaign resulted in a complete fiasco for the Allies and in the full success of Germany’s refusal to pay. What the Germans did pay they paid out of foreign borrowings which they later repudiated. Thus the whole burden in fact fell on foreigners."

Germany under Hitler was forever in foreign exchange trouble, probably helped by Hjalmar Schacht's MEFO bills as well.

It was the foreign exchange trouble which led to Hitler's 'export or die' speech. Export or die was not something coined by JR as most people in this country think, it was Hitler in 1937 who said that. It was also German forex shortages (caused by money printing) that led to Nazi self-sufficiency or autarky, a policy which has continued to hurt the world long after German Nazism died.

'Dr. Schacht' even before he fell out with the Nazis had to strike barter deals because too much Reichmarks/Mefo bills etc were floating around creating foreign exchange shortages. It may be fine to pay with Treasury Labour Certificates, but what happens when they come up for redemption?

The third and final point against these anti minority rantings is what happened to Germany after WWII.

Under Ludwig Erhard the Deutschemark was issued, which was a very strong currency. The German so-called 'economic miracle' under Erhard is an example for the entire world. He liberalized the entire country in a single day without the approval of the occupying allied forces, when America and Britain were trying intervention and money printing.

West Germany in fact paid for the upkeep of its 'occupation' armies also, though it was a beneficiary of the US Marshall plan.

The German 'economic miracle' was a not a temporary three year bubble. And the German people and its politicians and the Bundesbank has not forgotten the lesson even now as can be seen by what is happening in Europe.

Germany was hopelessly broke when Adolf Hitler came to power in 1933 . The Treaty of Versailles (le Traité de Versailles) had imposed crushing reparations on the German people, demanding that Germans repay every nation’s costs of the war. These costs totaled three times the value of all the property in Germany.

Private currency speculators caused the German currency to plummet, precipitating one of the worst runaway inflations in modern times. A wheelbarrow full of 100 billion-mark banknotes could not buy a loaf of bread. The national treasury was empty. Countless homes and farms were lost to speculators and to private Zionist controlled banks. Germans lived in hovels. They were starving.

Nothing like this had ever happened before - the total destruction of the national currency - German mark, plus the wiping out of German’s savings and businesses. On top of this came a global depression. Germany had no choice but to succumb to debt slavery under international Zionist bankers until 1933, when the National Socialists came to power. At that point the German government thwarted the Zionist international banking cartels by issuing its own money. Zionist bankers responded by declaring a global boycott against Germany.

Adolf Hitler began a national credit program by devising a plan of public works that included flood control, repair of public buildings and private residences, and construction of new roads, bridges, canals, and port facilities. All these were paid for with money that no longer came from the private international Zionist bankers.

The projected cost of these various programs was fixed at one billion units of the national currency. To pay for this, the German government (not the international Zionist bankers) issued bills of exchange, called Labor Treasury Certificates. In this way the National Socialists put millions of people to work, and paid them with Treasury Certificates.

Under the National Socialists, Germany’s money wasn’t backed by gold which was owned by the international Zionist bankers. It was essentially a receipt for labor and materials delivered to the government. Adolf Hitler said, “For every mark issued, we required the equivalent of a mark’s worth of work done, or goods produced.” The government paid workers in Certificates. Workers spent those Certificates on other goods and services, thus creating more jobs for more people. In this way the German people climbed out of the crushing debt imposed on them by the international Zionist bankers.

Within two years, the unemployment problem in Germany had been solved, and Germany was back on its feet. It had a solid, stable currency, with no debt, and no inflation, at a time when millions of people in the United States and other Western countries controlled by international Zionist bankers were still out of work. Within five years, Germany went from the poorest nation in Europe to the richest.

Germany even managed to restore foreign trade, despite the international Zionist bankers’ denial of foreign credit to Germany, and despite the global boycott by Zionist-owned industries. Germany succeeded in this by exchanging equipment and commodities directly with other countries, using a barter system that cut the private Zionist bankers out of the picture. Germany flourished, since barter eliminates national debt and trade deficits. Today Venezuela does the same thing today when it trades oil for commodities, plus medical help, and so on. Hence the Zionist bankers are trying to squeeze Venezuela.

Hjalmar Schacht, a Rothschild agent who was temporarily head of the German central bank, summed it up thus… An American banker had commented, “Dr. Schacht, you should come to America. We’ve lots of money and that’s real banking.” Schacht replied, “You should come to Berlin. We don’t have money. That’s real banking.”

Schacht, the Rothschild agent, actually supported the private international Zionist bankers against Germany, and was rewarded by having all charges against him dropped at the Nuremberg trials.

This economic freedom made Adolf Hitler extremely popular with the German people. Germany was rescued from English economic theory, which says that all currency must be borrowed against the gold owned by a private and secretive Zionist banking cartel — such as the Federal Reserve, or the Central Bank of Europe — rather than issued by the government for the benefit of the people.

Canadian researcher Dr. Henry Makow who is Jewish himself says the main reason why the Zionist bankers arranged for a world war against Germany was that Hitler sidestepped the Zionist bankers by creating his own money, thereby freeing the German people. Worse, this freedom and prosperity threatened to spread to other nations. Adolf Hitler had to be stopped!

Makow quotes from the 1938 interrogation of Christian Rakovsky, one of the founders of Soviet Bolsevism and a Lev Davidovich Bronshtein (Trotsky) intimate. Christian Rakovsky was tried in show trials in the USSR under Joseph Vissarionovich Stalin. According to Christian Rakovsky, Adolf Hitler was at first funded by the international Zionist bankers, through the bankers’ agent Hjalmar Schacht. The bankers financed Adolf Hitler in order to control Joseph Stalin, who had usurped power from their agent Lev Davidovich Bronshtein (Trotsky). Then Adolf Hitler became an even bigger threat than Joseph Stalin when Hitler started printing his own money.

Joseph Stalin came to power in 1922, which was eleven years before Adolf Hitler came to power.

Christian Rakovsky said:

“Adolf Hitler took over the privilege of manufacturing money, and not only physical moneys, but also financial ones. He took over the machinery of falsification and put it to work for the benefit of the people. Can you possibly imagine what would have come if this had infected a number of other states?” (Henry Makow, “Hitler Did Not Want War”).

Economist Henry C K Liu writes of Germany’s remarkable transformation:

“The Nazis came to power in 1933 when the German economy was in total collapse, with ruinous war-reparation obligations and zero prospects for foreign investment or credit. Through an independent monetary policy of sovereign credit and a full-employment public-works program, the Third Reich was able to turn a bankrupt Germany, stripped of overseas colonies, into the strongest economy in Europe within four years, even before armament spending began.” (Henry C. K. Liu, “Nazism and the German Economic Miracle”).

In Billions for the Bankers, Debts for the People (1984), Sheldon Emry commented:

“Germany issued debt-free and interest-free money from 1935 on, which accounts for Germany’s startling rise from the depression to a world power in five years. The German government financed its entire operations from 1935 to 1945 without gold, and without debt. It took the entire Capitalist and Communist world to destroy the German revolution, and bring Europe back under the heel of the Bankers.”

These facts do not appear in any textbooks today, since Zionist own most publishing companies. What does appear is the disastrous runaway inflation suffered in 1923 by the Weimar Republic, which governed Germany from 1919 to 1933. Today’s textbooks use this inflation to twist truth into its opposite. They cite the radical devaluation of the German mark as an example of what goes wrong when governments print their own money, rather than borrow it from private Zionist cartels.

In reality, the Weimar financial crisis began with the impossible reparations payments imposed at the Treaty of Versailles. Hjalmar Schacht – the Rothschild agent who was currency commissioner for the Republic — opposed letting the German government print its own money… “The Treaty of Versailles is a model of ingenious measures for the economic destruction of Germany. Germany could not find any way of holding its head above the water, other than by the inflationary expedient of printing bank notes.”

Schacht echoes the textbook lie that Weimar inflation was caused when the German government printed its own money. However, in his 1967 book The Magic of Money, Schacht let the cat out of the bag by revealing that it was the PRIVATELY-OWNED Reichsbank, not the German government, that was pumping new currency into the economy. Thus, the PRIVATE BANK caused the Weimar hyper-inflation.

Like the U.S. Federal Reserve, the Reichsbank was overseen by appointed government officials, but was operated for private gain. What drove the wartime inflation into hyperinflation was speculation by foreign investors, who sold the mark short, betting on its decreasing value. In the manipulative device known as the short sale, speculators borrow something they don’t own, sell it, and then “cover” by buying it back at the lower price.

Speculation in the German mark was made possible because the PRIVATELY OWNED Reichsbank (not yet under Nazi control) made massive amounts of currency available for borrowing. This currency, like U.S. currency today, was created with accounting entries on the bank’s books. Then the funny-money was lent at compound interest. When the Reichsbank could not keep up with the voracious demand for marks, other private banks were allowed to create marks out of nothing, and to lend them at interest. The result was runaway debt and inflation.

Thus, according to Schacht himself, the German government did not cause the Weimar hyperinflation. On the contrary, the government (under the National Socialists) got hyperinflation under control. The National Socialists put the Reichsbank under strict government regulation, and took prompt corrective measures to eliminate foreign speculation. One of those measures was to eliminate easy access to funny-money loans from private banks. Then Adolf Hitler got Germany back on its feet by having the public government issue Treasury Certificates.

Schacht , the Rothschild agent, disapproved of this government fiat money, and wound up getting fired as head of the Reichsbank when he refused to issue it. Nonetheless, he acknowledged in his later memoirs that allowing the government to issue the money it needed did not produce the price inflation predicted by classical economic theory, which says that currency must be borrowed from private cartels.

What causes hyper-inflation is uncontrolled speculation. When speculation is coupled with debt (owed to private Zionist banking cartels) the result is disaster. On the other hand, when a government issues currency in carefully measured ways, it causes supply and demand to increase together, leaving prices unaffected. Hence there is no inflation, no debt, no unemployment, and no need for income taxes.

Naturally this terrifies the Zionist bankers, since it eliminates their powers. It also terrifies Zionists, since their control of banking allows them to buy the media, the government, and everything else.

Thank you fus for replying,
what I'm trying to say is that by looking at liquidity position of the financial system and domestic assets of CB, we cannot judge the type of foreign exchange intervention that CB is currently making. Because similar changes in the liquidity position and domestic assets could occur in different types of foreign exchange interventions by CB, such as sterilizing foreign exhange outflows and unsterilized intervention on foreign exchange inflows. it is in this light i'm saying that in such a situation we can only judge the type of intervention by looking at latest changes in forex reserves which is unavailable. however if you know for a fact that dollars are being sold by CB to the financial system through the two state banks (which we donot know) coupled with simultaneous rupee liquidity injections, then of course there is no issue in the judgement that we are again heading towards a bop problem. thanks again for the kind reply

Hi Gihan
The outflow could have been capital or current.

Looking at reserve numbers may not really give a proper idea of sterilization. Reserve numbers may change due to interest income or marking to market. Sri Lanka's official reserves also contain fiscal reserves.

Fiscal reserve movements have no bearing on the exchange rate since there is no reserve pass-through (the domestic monetary base is untouched).

Sterilization is a money market operation. Variations in domestic assets or more particularly liquidity movements are good indicators of sterilization.

Domestic assets (T-bill stock) can also change due to serve appropriations for loan settlements.

The central bank can lend of sell reserves for any asset (bills, bonds, bricks or vehicles) other than rupee notes without hurting the exchange rate but only losing reserves.

The problem with selling for rupees is that it creates a liquidity shortage which is cleared with newly created rupees as well as a loss of forex reserves.

The problem with creating additional rupee notes is that according to the law or rules the new rupees which are liabilities of the Central Bank are exchangeable for dollars. Creating other central bank liabilities such as CB Securities does not have the same effect in the monetary system since they are not exchangeable for dollars.

How can you say for sure hat right now CB is sterilizing captal outflows? Samilar changes in interest rates and exchnge rate would occur in a situation where CB is making an unsterilized foreign exchange intervention on capital inflows. We can only judge this by looking at latest changes in gross foreign reserves of CB, which is currently unavailable.