Shilling, Α. G. (2014) “Why Countries Wage Currency Wars, BloombergView, 23 Νοεμβρίου.
The U.S. dollar has been on a tear this year, rising against the currencies of virtually all major developed economies. What we’re seeing around the world is intense — and in some cases, deliberate — devaluations. What’s going on and what are the investment implications?
One reason for the devaluations is that, when economic growth is weak — as it has been globally for five years — governments feel tremendous pressure to increase exports and reduce imports to restore growth. Often that means lowering the value of the currency so that products sent abroad are relatively less expensive and those coming into the country more so.
The European Central Bank, for example, wants to depress the euro to keep deflation at bay. The euro’s earlier strength drove down import prices, forcing domestic producers who compete with imports to slash their prices. As a result, consumer price inflation moved steadily toward zero. It was a mere 0.4 percent in October versus a year earlier.
Σχετικές αναρτήσεις:
- Louri-Dendrinou, Ε. (2014) “Economic and financial changes since the onset of the global and euro area crises“, LSE EUROPP Blog, Greece: Taking Stock, 06 Νοεμβρίου.
- Foroohar, R. (2014) “Where the Next Financial Crisis Will Come From“, Time Magazine, 03 Νοεμβρίου.
- Yves Smith — Naked Capitalism Blog, “Interview with Costas Lapavitsas: The Financialization of Life“, Real News Network, 23 Οκτωβρίου.