Currency wars

History may not repeat itself, but the parallels between the world economy in the 1930s and the world economy today are becoming hard to ignore. Then, as now, the world was in the grip of a severe economic downturn and painfully high unemployment. Then, as now, governments tried to restore growth and exports by devaluing their currencies and carving out trade blocs, risking a chain reaction around the world. Then, as now, the system was rudderless, unstable, and insecure – which persuaded countries to protect their own national interests, even at the expense of the collective good.

The world has not yet plunged into a full-scale currency war, but the trends are not good. This fact was implicitly acknowledged by G7 finance ministers meeting last Tuesday who went out of their way to renounce “targeting exchange rates,” only to sett off a new and even larger wave of currency volatility. China continues to rebuff pressure to end the fixed and undervalued Yuan, exacerbating global imbalances and fuelling accusations of beggar-thy-neighbour trade strategies. The U.S. continues to drive down the dollar and flood the world with capital through successive rounds of quantitative easing. Brazil, Switzerland, and others continue to intervene aggressively intervene in markets to arrest their currencies from appreciation.

more here: http://www.theglobeandmail.com/commentary/currency-wars-its-starting-to-look-a-bit-too-much-like-1931/article8809968/

Were screwed