[OPE] "Currency wars"?

The point is that while capital controls can reduce currency speculation,
they by no means wipe it out altogether.

Xinhua comments:

"Traditionally, a currency war refers to the situation where one nation,
relying on its strong economic power, buffets its competitors and seizes
other nations' wealth through monetary and foreign exchange policies. It is
a form of economic warfare with cold premeditation, specific purpose and
considerable destructive power. However, there is no obvious evidence that
many countries are conducting a "currency war" in this sense. Actually the
meaning of the so-called "currency war" right now is much more simple and
specific: some nations, which are facing internal economic difficulties,
devalue their currency to simulate exports and create more jobs. If more and
more nations adopt this kind of foreign exchange policy, the interest
conflicts between them will get worse, damaging the recovery of the global
economy.
The current situation is far from a war, although there is more conflict
between nations' monetary policies. The Western media's hyping of a
"currency war" has exaggerated divisions on currency policies and brought
more tension to the international community."
http://business.globaltimes.cn/world/2010-10/582966.html

J.

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Received on Sun Jan 9 15:52:09 2011