Beggar-Thy-Neighbor Currency Devaluations Proved Ruinous For The Global Economy In The 1930s, But The World Is Setting Off Down The Same Slippery Slope Again
The Global Currency War Is Escalating
According to numerous high-level insiders, we’re in a dangerous global currency war:
- Current Bundesbank president Jens Weidmann
- St. Louis Federal Reserve President James Bullard
- Outgoing Bank of England chief Mervyn King
- Russian Central Banker Alexei Ulyakeyev
- European Central Bank board member Benoit Coeure
- Reserve Bank of Australia Governor Glenn Stevens
- Brazil’s finance minister Guido Mantega
- Billionaire investor George Soros
Actually, we’ve been in a global currency war for years.
As the Wall Street Journal asked in 2010:
Beggar-thy-neighbor currency devaluations proved ruinous for the global economy in the 1930s. Is the world setting off down the same slippery slope again?
Yes, we are.
(And James Rickard and Reggie Middleton think that Germany’s demand for its gold is part of the currency war.)
And it’s not just conservative voices such as the Journal slamming the currency wars. For example, former Secretary of Labor Robert Reich points out that a weak dollar makes everyone poorer, and any new jobs created by a a policy of devaluation are low-wage jobs.