Headlines recently spread the news of a possible "currency war". What is it? In an interview with the newspaper Financial Times, IMF chief Dominique Strauss-Kahn warned on Tuesday about attempts to rescue the economies of individual countries using the currency exchange rates. According to Strauss-Kahn that could lead to currency war. Well, the problem is that, as the currency strengthens and others weaken, the goods from a country with a strong currency are increasingly expensive, decreasing the demand and the economy weakens. The normal market mechanism. There would be nothing extraordinary, if it was not built deep into the current system of paper currency mechanism, allowing for printing money to control the value of the currency.
In many countries, "the idea that currency can be used as a political weapon" is becoming popular. The problem is that if some people start to weaken their currency, the other will do the same for the race.
But in the era of paper currencies is the only rational action, to do the depreciation of currency to remain on the surface and rescue the economy's competitiveness. This action is also an unstoppable. Everyone will ask, "If others can weaken and print their currency and there is no guarantee that they will not do that, then why should I not do it, or give anybody any guarantees?". So we are awaiting rally of currencies debasement.
The last attack went in the direction of China. "According to American and European politicians, the Chinese yuan is undervalued by 25-40 percent. Giving Chinese companies an unfair price advantage and increasing the attractiveness and the export of goods from that country at the expense of other states." China, of course, said to leave them out because they do not have a problem ... And they're playing the same stacked deck what every other "honest" player ...
By the way, whether or not you think that the scenario of the World Economic Wars exercised in front of our eyes ...
