How do you hedge when shots are pips? The next world war will be computerized. The global economy is on the brink and battle lines are forming with one objective, restoring economic balance. Properly engineered devaluation measures would accomplish precisely that. This is a new age of currency wars. In the past countries would directly manipulate the value of their currency with trade wars and the like. But today’s currency war is a result of unconventional monetary policy by central banks, which indirectly impacts the value of a countries currency.
The G7 has been working hard to defuse investor concerns of a currency war, but recent comments have only stirred up confusion in the markets prompting an unintended response. On Tuesday the groups said “fiscal and monetary policies must not be aimed at devaluating currencies” a statement that had been directed at Tokyo.
Shinzo Abe, Japan’s new prime minister, is being accused of manipulating the value of the Yen to gain an unfair competitive advantage in international markets. Shinzo has been working tirelessly to convey that his policies were not aimed at devaluing the country’s currency, but that they were targeted at deflation… and the devaluation of their currency was just an implication of that objective…. Really?
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