Wednesday, September 29, 2010

Currency wars...

...a continuing series. This in light of China's "commitment" for "flexible" exchange rates.

(From FT's Alphaville)

Within a single week 25 nations have deliberately slashed the values
of their currencies. Nothing quite comparable with this has ever
happened before in the history of the world. This world monetary
earthquake will carry many lessons.

Henry Hazlitt 1948 wrote this in a book “From Bretton Woods to World
Inflation”, which predicted the inevitable collapse of this fixed
exchange rate mechanism. It was a compilation of his editorials from
both his time at the New York Times and Newsweek, which ridiculed the
prevailing economic Keynesian thinking to great effect. A brilliant
journalist, economists and liberal philosopher, this man intuitively
understood the pernicious nature of the Bretton Woods fixed exchange
rate arranged in 1944.

Which made us wonder, just how many countries have engaged in
interventionist currency policy in the last year alone?

Here, for a start, is our preliminary and very non-exhaustive list (in
which we count de facto intervention, suspected intervention and talk
of intervention — and include talk of quantitative easing among the

•Federal Reserve $ Dollar – via QE.
•Bank of England £ sterling – via QE.
•Japanese yen intervention.
•Taiwan dollar – suspected intervention.
•Argentinian peso intervention.
•Brazil real intervention fears.
•Russian ruble intervention.
•Australian dollar RBA intervention.
•SNB Swiss franc intervention.
•Poland’s NBP zloty intervention.
•Colombia’s peso intervention.
•Indonesian rupiah intervention.
•South Korean won intervention.
•Thai baht intervention fears.
•Ukrainian hryvnia intervention.
•Israeli shekel intervention.
•Chilean peso intervention fears.
•And Turkey has adjusted its reserve requirements in order to weaken the lira.

And also:

•Peruvian sol intervention.
•Phillipines peso suspected intervention.
•Romanian leu intervention.

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