Brazilian Finance Minister Guido Mantega spilled the beans on Monday when he committed the cardinal sin of telling the truth.
“We’re in the midst of an international currency war,” Mr. Mantega said. “This threatens us because it takes away our competitiveness.”
“The advanced countries are seeking to devalue their currencies,” he said, mentioning the United States, Europe and Japan in the context of what he portrayed as an intensifying trade competition.
All over the world nations are in a race to the bottom with their currencies. The objective is to gain trade advantage over competitors. In other words this is a global trade war, one that is being done by destroying people’s savings.
In all, about 2/3rd of the global economy is in the process of debasing their currencies. Nothing has happened like this since the 1930s.
It’s a return to global beggar thy neighbor economic policy that proved so hopelessly flawed in the Great Depression.