"A new global war has broken out. But this war is economic. So far, it's not a shooting war - at least, not a shooting war involving physical bullets. Yet each nation is firing financial bullets at its own currencies.
This international currency war already involves China, Japan, Brazil, Korea and even the United States, to name just a few of the main combatants, with each country's central bank taking the point position on the front line.
Through the central bank, each nation is attempting to help its own economy by lowering the value of its national currency in foreign exchange terms. The central bank that succeeds will see its country's export total zoom and will either narrow (or even eradicate) an existing current-account deficit, or (as is the case with countries such as Korea and China) will see its currency reserves soar.
You see, this war is over the ability to export finished products, to importing nations. It is about keeping your own citizens employed during an extended economic slowdown in global demand, even if that means damaging national relationships. This war will vault the winners into positions of global leadership, while severely penalizing the losers..."
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