Interesting Article********** Currency wars back with unconventional weapons destabilize the global economy

December 22, 2014, 13:36
 

Follow-up - ((eighth day))

The collapse of the Russian ruble and the Nigerian naira to the strict policies of the central banks of Japan and the Swiss, the issue of exchange rates back to the fore strongly with currency war could be raging in 2015.

But economists believe that no country can be allowed to run in the same open war on the currency, so it will be a war with unconventional weapons.

Interest rates and stand out as one of the most prominent weapon in the new currency war, which could lead to a deeper than the violent and intermittent shocks associated with lower oil prices, which led to the collapse of the ruble results.

The aim is to gain shares in export markets, and can lead to a sharp rise in inflation and destabilize the economy.

The crisis of the thirties of the last century linked to reducing currency rates starting.

He summarized the Economic Analysis Council, which includes experts advising the French government that it "can not be a weak currency to everyone at one time if the currency dropped the price to rise again."

And dissemination of Nouriel Roubini, an economist who became famous prediction of the financial crisis in 2008, the early December an article entitled "Back currency wars".

And verified in an article in the Japanese central bank's decision to enhance monetary easing policy followed by in a move that surprised everyone, which led to a decline in the yen.

Roubini believes that careful monetary easing in Japan reflected on South Korea's direct competition for Japanese exports where forced the central bank to cut interest rates twice during the 6 months to contain the yen's strength.

Since this article was published in the escalation of tension, especially in emerging countries exchange markets, which saw the collapse of the ruble and the naira and the Turkish lira fell to its lowest historical level.

The European currency has lost since the beginning of the year more than 10 percent of its value against the dollar after the European facilitate fiscal policy tightening as opposed to US policy.

Switzerland is making strenuous efforts in the face of rising price of its currency. Central bank was forced Thursday to take the unusual decision to never enter a negative interest rates on bank deposits.

It imposes no tax to stem the flow of capital as investors turn to the Swiss franc due to the weakness of other currencies.


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