With the arrival of Donald Trump in the White House and in connection with his repeated statements about the need to take a course on protectionism (that is, the protection of national manufacturers and the increase in customs barriers to imported goodsFirst of all, Chinese and Mexican) in the world they spoke about the new turn of trade and currency wars. Is it possible to expect new battles and what consequences can they entail?
What threatens the world of the dollar?
Contemporary trade and currency wars is a rich history. You can list the main milestones of these wars, both local (in one separately taken region of the world), and more global, and what goods and whose currencies were used as shells. It is appropriate, for example, to remember that the top of the world destinies at the end of the twentieth century - the international club "Big Seven", or G7, as it is briefly called, - formed in the mid-70s precisely as a result of attempts to settle currency courses And thereby putting the end of currency wars.
The current current of tension is associated primarily with the growing confrontation between the United States and China. Before its inauguration, Donald Trump promised to introduce an import duty in 45 percent for each product imported into a new light from China. If this measure is introduced, then you can be confident: China will not remain in debt. Economists and financial analysts have already calculated losses that will carry both countries and specific consumers, in essence, announced outside the law of goods.
But experts emphasize that in modern wars, the stop is still not on the commodity, but on the currency component. At the end of the zero year, even the term "competitive devaluation" appeared when the authorities of this or that country depreciate their currency, thereby stimulating the volume of their exports and increasing the competitiveness of national companies. By the beginning of 2011, the US authorities lowered their dollar at least 20 percent, which, in turn, led to an increase in courses of national Latin American currencies and deterioration economic Regulations A number of Latin American countries. The relay was picked up by Japan, reducing the cost of yen by 25 percent in relation to the decreased dollar. Currently, China, which is actively devaling to his yuan, has become an object of international attack.
World economic crisis Stimulates leading economies to increase competitive devaluation. What's next?
"Nothing, empty fears - sure professor of the Institute of Business and Business Administration of Ranjigs Mikhail Tailorwho gave an interview with truth. "In my opinion, there will be no next turn of such wars, and the current discussion is caused solely by the expectation of new sudden statements from Donald Trump.
Modern currency war is an extremely difficult thing, a kind of boomerang. One-sided devaluation of currency in the current economic conditions Always turns around for a country with big losses.
If we talk about the United States, the depreciation of your own assets, expressed in dollars, is in no way profitable, and the export benefits of devaluation in this case will be dubious.
Today in the world, of course, trading currency competition is, primarily a dollar, euro and ascending yuan. Strengthening the latter Many frivolous analysts are trying to issue some threat. In fact, the volume of global economy and world trade are growing - accordingly, if the share of the same dollar in this cake will decrease, then the piece of pie still continues to remain very weighty.
Of course, the yuan will have a full-fledged backup currency and will move the others - it is inevitable. But it will be a natural, not a military process. "
"So far no hostilities are announced, the parties are under the stage of so-called currency interventions - supports colleague analyst Group of Companies "Finam" Bogdan ZvarichAlso who talked with "True.Ru." - Of course, if the United States is reoriented to the position of protectionism and will introduce favored regime for its manufacturers, it will be possible to talk about the start of the trade war between the United States and their main trading partners - China, Japan, the European Union.
Already, due to the ocean, warning shots are heard in the form of applications that Europe uses the low cost of its currency to maintain its economy and provide a competitive advantage to its companies by reducing the cost of manufactured products. Previously, Donald Trump declared that he wants to return production to the United States. And it is possible that the United States will also weaken the dollar, which is now in very high values. "
According to Bogdan Zvarich, a gradual care from the use of a dollar in bilateral international calculations becomes an effective tool to combat the devaluation of national currencies. In particular, experts propose to return to the practice of foreign trade currency clearing (that is, international settlements between countries based on the mutual standings of payments for goods and services that have an equal value calculated in the clearing currency at agreed prices. - Ed.).
So, the response of Russia to the sanctions imposed against it can be a transition to clearing agreements with countries in Asia and Latin America. Moreover, experts note that modern conditions The main economic advantage of clearing is not at all in the very fact of this transition to mutual settlements, but in the possibility of a sharp increase in export lending due to the emission of money, but without inflation growth.
For the overwhelming majority of the general public, and for some traders in the Forex market, it may seem strange that many countries purposefully weaken their own currencies by interventions aimed at the devaluation of the currency. During recession, weakening currency becomes good tool To ensure the competitive advantage of a certain country that helps to stimulate the growth of the economy. However, as soon as one country begins to reduce the cost of its currency, other countries can apply the same tactics to level advantages. Such actions call the currency war in which countries are trying to maintain the low cost of their currency compared to other currencies.
What is so attractive a weak currency?
During the period of economic growth, many countries, nevertheless, prefer strong currency. A strong currency makes it possible to buy more products to buy more products and can cause raising standard of living. In addition, a strong currency helps to control inflation.
On the other hand, the weak currency also has their own advantages, at least the leaders think so different countries. If the currency of any country is weaker than other currencies, exports from such a country will be cheaper and attractive. His commitment to preserving the relative weakness of its own currency is famous for Japan, since such a strategy helps to hold low prices for exported goods that residents of other countries will gladly acquire. The same statement is true for China, which prefers to have a weak yuan in relation to Dol. The United States, as it means that the cheaper Chinese products will buy a larger number of Americans.
Lower prices for exports help the country to sell more products to other countries, and this, in turn, can give impetus to creating jobs, as to meet the demand for cheap products, a country with a weaker economy should produce more products. This situation can stimulate the growth of the economy. The devaluation of the currency can cause the growth of the economy, and that is why many countries are interested in a weaker currency during the recession.
How can country weaken your currency?
One of the strategies that countries are guided to maintain the weakness of their own currency is the binding currency. Not so long ago, Switzerland introduced the ceiling in relation to the euro, which more clearly demonstrates the essence of the concept of binding. Observing the rapid increase in the cost of the franc in relation to the euro, in Switzerland, they decided to bind the cost of the franc to the euro in order to establish a certain franc growth limit relative to the euro.
The country can choose another way of weakening its own currency:
- Reduced interest rates: In an attempt to reduce the cost of the currency, the overwhelming majority of central banks choose a decline in interest rates. The lower interest rate of a certain country makes its currency less attractive. Savings in such an economy also lose their appeal, due to the low level of profitability. As a result, investors are beginning to look for higher-yield assets, and the currency of such a country may lose their value in relation to the currencies of other countries.
- Increase volume cash: In some cases, the country can simply create money from nowhere. An increase in the volume of money supply means more money and lesser value. In general terms, the offer exceeds the demand, which means that the cost of the currency has nowhere to go except to go down. An increase in the amount of money supply can be achieved by the state of its own assets. In the United States of America, a federal reserve may increase the amount of money supply due to the purchase, or even purchases valuable papers private companies. Mainly, it is for this that the Fed creates new money, due to which the amount of money supply increases. This tactic is called quantitative mitigation, and a single increase in the amount of money supply is called currency intervention.
- Buying assets of other countries: Also, the country can buy assets of another country. One of the ways in which China is managed to preserve the weak yuan in relation to the US dollar is the purchase of US assets. This means a higher demand for a dollar that raises the value of the dollar, helping the yuan to retain the lower position, which corresponds to the plans of the Chinese government.
Naturally, the use of such tactics helps to devalue the currency of a certain country. But soon, representatives of other countries are resorted to similar measures to reduce the cost of their own currency to benefit from exports with competitive prices and economic growth.
In some cases, countries that actively reduce the value of their own currency are punishable by other countries by increasing taxes and other trade restrictions that complicate the procurement process of cheaper products in large quantities.
Problems arising from currency wars
Along with how some may argue that a weaker currency can be useful in economic recession, others note that currency wars can create certain problems that provoke even more problems.
One of the most serious problems is that the attempts of several countries to weaken their own currencies overnight (and to extract certain benefits from this) may cause instability. While everyone is trying to get a turn due to currency manipulations, global market economy It may become extremely unstable and, ultimately, it can reduce the amount of investments and trade, and this, as a rule, limits development, and not contribute to that.
Although many believe that the greatest danger of currency wars is in the prosperity of inflation. With an increase in the amount of money supply and depreciation of currencies, prices are growing, and for one single currency can already buy less product than earlier. The level of purchasing power of the population is reduced. To some extent, inflation is a desirable side effect of economic growth. However, too high inflation gives rise and levels the savings of the middle class. In this case, it looses the entire system and can cause economic collapse. Some fear that currency wars, especially in today's global economy, which has become very interrelated, can provoke the development of hyperinflation and serious trouble for the system as a whole. The exhausting currency war can cause numerous problems for the global economy as a result of which none of the economies will receive due incentive.
Accusations of currency manipulations
Of course, there are always accusations of currency manipulations. Recently, US representatives accused China in the artificial understatement of the value of Yuan for several years. This led to threats from the United States to increase import duties on the import of Chinese products in the United States and attempts to press China to increase the cost of Chinese currency (and reduce the value of the US currency relative to Yuan).
IN lately, the most blatant example of devaluation of its own currency boasts Japan. In 2011, Japanese officials carried out several interventions to hold the cost of the yen at a low level and prevent the rise in the cost of exports. And indeed, they say that Japan can introduce additional measures to hold the current value of its own currency in order to be able to rebuild areas that seriously suffered from tsunami in March last year.
While the United States threatens China and Japan's finger, its representatives also use certain methods to maintain the value of the dollar at a low level. But the United States does not have such an obvious tactic as in China or Japan. Indeed, a quantitative mitigation program that was introduced at the end of 2010, the leaders of the eurozone countries were criticized, which were disappointed with a decrease in the value of this currency. Despite the fact that the credit capabilities of the European Central Bank allowed him to reduce the value of its currency, to the present time it was charged with such a possibility rather economically. Along with the fact, as the United States and Japan persistently hold their interest rates on pretty low levelsIn July 2011, the ECB raised his rates. Taking into account the fact that in the US began to circulate rumors about the third stage of quantitative easing, soon we can witness a tense currency war.
What is happening now?
On the this momentDespite certain attempts to reduce the value of certain currencies, the full-scale currency war has not yet begun. In various countries (and currency zones), they are observed for the most part, individual attempts to devalue the currency to stimulate the economy. However, so far these attempts were relatively insignificant and did not cause large inflation ... so far.
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None of the major economies of the world can now boast of sustainable growth rates. China, Brazil and Germany feel better than others, but the general trend does not change this: the band of good macroeconomic news is replaced by a portion of bad. Unemployment is not in a hurry to decline, the banking sector is far from the combat form, long ago there is no growth in the housing markets. Financial investors are forced to nervous then Greece, then Spain, then Ireland, balancing on the verge of default. Against this background, statesmen who are responsible for economic development, there is a temptation to ensure economic growth by devaluation national currency.
Power - in weakness
The mechanism of stimulating growth due to the weakening of its currency is quite simple. First, some of the most expensive imported goods are replaced by domestic products. The same applies to services - for example, exit tourism is replaced by internal. Secondly, local products are becoming more competitive in foreign markets. So stimulating economic growth by weakening its currency is in a certain sense of "borrowing" growth in neighbors. Then, when the situation worsens in the neighbors, they themselves resort to a similar means.
But unlike the former crises that have had national or regional borders, now the situation is similar in most countries of the world. Everyone really wants to at least lower a course of their currency and this achieve several additional interest of economic growth. When all countries are at the same time forced to go to the same measures, a peculiar "tool" is formed in the foreign exchange market, warns the IMF in the world economy review published recently. What, according to the head of the International Monetary Fund of Dominic Strauss-Khana, "will create a threat to the restoration of the global economy and will have extremely destructive consequences for a long time."
Fort investor
Investors who are disappointed with the economic results of the United States and Europe are paying more attention to the "young" markets. There economy grow faster, and the budget situation is better than in developed countries. It causes a solid capital influx and, as a result, the growth rate of the local currency is even with a negative balance of foreign trade balance.
IN last years Brazil felt more stronger than others. This forced her in October 2009 to introduce a 2 percent tax on speculative capital - the purchase of foreigners Brazilian bonds. A year later, this tax was upgraded to 4%. And without any transition period: On the doubling of the tax, the Minister of Finance Guido Mantga announced on October 4, and by virtue of it entered the next day. It is not by chance that Montaga was the first loud to declare foreign currency wars. Since the end of 2008, Brazilian Real has already strengthened by 36%. Investors are attracted except good economic indicators Countries are high interest rates (this year they rose from 8.75% to 10.75%). In order not to increase inflation, it is necessary to "drive off" tax investors. But real (taking into account inflation) banknotes In Brazil, according to Bloomberg, the highest among the 20 largest economies of the world. And it is already clear that the increase in antinvestment tax will not be corrected. The fight against the strengthening of Real will become one of the most difficult tasks of the new government (in late October in Brazil the second round of the presidential election), quotes Reuters Gray Newman from Morgan Stanley.
Brazil is not one such. The other day, the presidents of Chile and Colombia were discussed against the strengthening of their currencies with the heads of the National Bank. Already taken measures to slow down the strengthening of the national currency, Korea, Thailand, Taiwan, Peru.
Who is softer?
When the yen rate to the dollar rose to a maximum for 15 years, and Japan had to go to the unusual country for the developed country. From September 15, for the first time in 6 years, National Bank began currency interventions in order to weaken Ien. And then lowered the key interest rate on loans to a range of 0-0.1%. Parallel to the National Bank announced a buying assets for $ 60 billion - this measure should give banking sector Means for lending to the economy.
Japan's prime minister Naoto Conguses National Bank This is not limited to this: while the course of the yen does not decrease, there is no hopes for the revival of the economy. Since the problems of Japan are not unique, it is irritated by John Maikin from American Enterprise Institute, it is clearly not possible to solve them. Japan simply forces other countries to follow her example. Next in the chain of countries going on mitigation monetary policywill probably be the United States. The leadership of the Federal Reserve System discusses the need for these measures for several weeks.
Against China
The last round of currency wars began the American Congress. In September, he adopted a bill, threatening China with regular sanctions for the underestimated yuan course. This law allows US companies to demand an increase in import duties, referring to the underestimated yuan rate as a subsidy of Chinese manufacturers.
Attempts to persuade the PRC to strengthen Yuan recently connected Europe led by Jean-Claude Juncker, head of the Eurozone Finance Ministers. Since June 19, when China announced that it will make a course of Yuan more free, it increased in relation to the dollar by 2.15%, but fell to the euro by 9.4%. At the same time, China rejected the docks and Americans, and Europeans. Instead of increasing the course of Yuan to the euro, he promised Europe to support the economy of Greece, bought her state binding.
Haste attempts of different countries to conduct devaluation lead only to one: all currencies are becoming less stable, warns the IMF. This trend increases and, due to the fact that in recent years, world trading volumes have grown many times (see chart).
Russian specificity
In Russia, in recent weeks, they also talk a lot about the potential devaluation of the ruble. The former first deputy chairman of the Central Bank Sergey Aleksashenko considers it inevitable, the current first deputy chairman of the Central Bank, Alexei Ulyukayev, argues that there is no need for it. A fundamental difference from other developing markets is that Russia is afraid not to strengthen, but the weakening of the ruble. While Brazil and Korea suffer from excessive capital influx, he has not yet reached Russia. In addition, Russian exports have not been growing recently (in particular, due to drought and failing), but imports increase very quickly - by 30% compared with the level of last year.
In such a situation, a small (10-20%) devaluation would only help russian economy Faster growing. But the chances of what it happens is not too great. First, the devaluation of the ruble is hindered by other countries that weaken our currencies faster. Secondly, there is a possibility that some of those investors who are now chased almost everywhere, will definitely come to Russia, and we even have dollars in sufficient quantities in a growing import, so as not to drop the ruble.
Managers of central banks are usually not included in the list of persons who participate in wars. However, the global economy is a dangerous area, complete threats to welfare.
This statement gives a reason for the formation of assumptions that there is a constant struggle for a competitive advantage in which each country uses its currency as a weapon. According to a generally accepted opinion, the monetary authorities in order to give impetus to the country's economy are trying to reduce the exchange rate of their currencies in order for the goods that sell exporters of their countries become cheaper for foreign buyers. When all countries begin to come in a similar way - the currency war begins.
To confront each other central banks Usually reduce interest rates and take other measures to reduce their own currency and stimulate growth. However, it creates imbalances due to the fact that cash flows They begin to shift towards countries with higher interest rates, which causes an increase in currencies in these countries and damages local exporters. International or local, these segless currency wars create real danger, as well as real winners and losers.
Situation
The war began again after China in August allowed his national currency (yuan) significantly depreciates in the framework of the largest devaluation for more than 20-year period. The decline in the exchange rate of the Yuan caused concerns that China may continue to allow its currency to decline in order to ensure the support of the economy. In 2015, currency markets were confused and experienced shock when Switzerland abolished the exchange rate ceiling of the country's national currency to the euro, which was held throughout the previous 3 years; Countries from Canada to Singapore also unexpectedly softened their monetary policy. Last year, at least 24 countries reduced the levels of their interest rates, and European central bank Imprbent a strategy of negative interest rates. Currency wars have been going for many years, since countries are trying to find a way out of the recession caused by the 2008 financial crisis. The USA, Japan and Europe used bond shopping programs and reduce interest rates in order to stimulate their economies.However, the restoration of economies began to slow down and central banks continued to mitigate their policies to target deflationary risks (decline in prices, which can negatively affect the value of consumer spending and reduce the growth of the economy). So who got the main blow? The predominantly of this country was the United States in which the first (in almost a decade) increases interest rates in 2015 caused a dollar growth in relation to all of the 16 major world currencies.
Prehistory
Brazilian Minister Guido Mantager in 2010 gave currency wars their name when he said that he had seen the intentional harassment of the goals of reducing exchange rates. His country became the first victim in this war after, as a result of lower interest rates in the United States, cash flows poured into emerging markets in search of higher profitability, which caused demand for Brazilian real, increased its value and made Brazilian exports more expensive. Japan, on the contrary, received an advantage due to the fact that the yen quotes decreased by 30% in relation to the dollar from the beginning of 2012 to the end of 2014, which caused a sharp increase in the profits of such companies, such as Toyota.The most famous example of competitive devaluation occurred in the period of the Great Depression in the 1930s during the time he passed the change of currency system and the country refused the system of the Golden Standard, within which the currencies were tied to the cost of gold. Prior to its collapse in 1971, the Bretton Woods system prevented a repetition of a neighbor type strategies, tieting the cost of many currencies to the dollar. Throughout the past decade, China faced criticism due to the fact that the country reduced the cost of the yuan; Criticism was expressed in view of the fact that the cheap goods were promoted by the transformation of the country in the export giant.
Argument
Central banks implement non-standard policies to protect their economies, and the race begins to gain momentum. The consequences of monetary policy decisions may be negative for the markets, which will have an impact on cash flow and cause growth of volatility. More and more countries tie their currencies to each other in order to stabilize the exchange rate. These attempts are aimed at improving communication and more unity of the actions of central banks, since the fluctuations in currency courses create uncertainty and negatively affect investment flows.Large 20-ki countries regularly voiced their promises to abandon the competitive devaluation of their currencies, but at present, countries that continue devaluation are almost not criticized. All this time, US exporters continued to feel the pressure that puts on the risk of risk the stability of the restoration of the world's largest economy. The debate on how long the economies of the countries of the world will continue this war, as well as as to when the world is already declared - it is already underway for a very long time.
Introduction
Currency wars or competitive devaluation are such international relations in which countries compete with each other in achieving a relatively low course of their currency.
If the real value of the national currency decreases, the cost of exports decreases. What contributes to an increase in its volumes. The import of the country will on the contrary rise in price, but the cost of the domestic industry will decrease and the level of employment will increase. Nevertheless, the rise in import prices can harm in the form of a decrease in the purchasing power of the population. Government actions to reduce the cost of national currency can lead to response actions of other countries, which in turn can lead to a decrease in international trade, harm to countries.
Competitive devaluation was a rare phenomenon in the history of the development of different countries, because Those preferred to maintain a high value of their national currencies. One of the first currency wars in history occurred during the Great Depression in 1930, when countries refused the Golden Standard using the currency devaluation process to stimulate their economies. This period was unfavorable for many countries that made unpredictable changes in exchange rates that led to a decrease in the level of international trade.
According to the Brazilian Finance Minister Guido Mantga, world currency wars broke out in 2010. This point of view was supported by many financial journalists and officials from around the world. Other policies and journalists proposed that the phrase "Currency Wars" oversees the degree of hostility of this process, although agreed that the risk of further escalation exists. States participating in 2010 in competitive devaluation used such a set of political instruments as government intervention, the introduction of capital control, and quantitative mitigation. The most global conflict happened between China and the United States in the evaluation of Yuan. This process is carried out with the help of various mechanisms, and the opinions of economists about the consequences of this war were divided. Some believe that this will lead to negative consequences In the global economy, some on the contrary. In April 2011, many journalists began to report that the wage was subsided. However, Guido Mantga continued to argue that the conflict is still going on. In March 2012, he announced additional measures to protect the national currency - Real.
Devaluation with its negative consequences has always been the least preferred strategy of governments. According to the American economist Richard N. Cooper, a substantial devaluation is one of the most "traumatic" politicians who can take governments of countries that almost always leads to indignations in society and calls for the change of government itself. It can lead to a reduction in the population, the standard of living of citizens, the purchasing power of the population. It may also lead to inflation. Due to devaluation, interest on the external debt states may increase if they are expressed in foreign currency and reduction of inflow foreign capital. At least until the XXI century, a strong national currency was a sign of success and a high level of state development while the devaluation was inherent in weak governments and developing countries.
However, when the country suffers from a high level of unemployment or wants to pursue export growth policies, a low exchange rate of the national currency may be a significant advantage. Since the beginning of the 1980s, the International Monetary Fund suggested a devaluation process as a potential solution. economic problems For developing countries that are constantly spending more import funds than they earn export. An increase in exports contributes to the development of domestic production, which in turn increases the level of employment and GDP<#"660163.files/image001.jpg">
(Fig. 1)
It is clear that this policy causes dissatisfaction with other countries because new program Mitigating the monetary policy of the Fed threatens them, primarily China, an increase in the volume of capital flows into the markets of these countries, which will cause the acceleration of the growth of bubbles in the assets market and the growth of national currencies.
As a result, we can expect gradually to weaken the position of the dollar in world markets and strengthen the disintegration processes in the global economy, and then we seem to be deepening the regionalization of the global economy with the creation of new regional centers and regional currencies.
The current situation is still stronger than the fall of 2008 - confidence in statements of officials on stabilization of the state of economies is accompanied by real difficulties and obvious problems of most countries. The debt problems of states and weakness of economies are becoming increasingly relevant, since lending to the economy has not been restored. Not the best is the position of banks and other financial institutions - from the active stage of crisis, there were essential volumes of "bad" debts that managed to hide on the balance sheets, but it is possible to solve this problem only after the revival of the economy and the increase in solvency real sectorsWhat does not happen in reality. In fact, world economy Everything walks on the same closed circle, about which we spoke another year ago - without restoring crediting, economic growth is impossible, and without economic growth it is impossible to restore the economic lending, because enterprises are not ready to take loans for the production of products under the compressible demand for their products.
A key factor to talk about the inevitability of currency wars is not debt problems, but the weakness of domestic demand in most countries. Citizens do not want to consume, and even more so take consumer loans, but prefer to save. So, in the US, the cost of savings reached 6% - on world standards a bit, but against the background of what was in this country in the previous decade, this is a very large amount. And if Japan is in such a position for more than 10 years and is relatively used to this state of affairs, then for most other countries, salted domestic demand is a catastrophe. Thus, all countries associate the possibility of exiting depression with increasing their exports.
But, since the internal demand is not growing in most countries, then global demand is growing extremely weak. In this situation, the only way to increase the value of export is the devaluation of the national currency and an increase in the absolute volume of exports, but its value equivalent.
The problem is that if everyone is trying to devalue their currency at the same time, no devaluation occurs. Since the beginning of the 70s, the currency is tied exclusively to each other, and for anything outside the currency system. Exactly, therefore, the advantage in the "Devalvation parade" receives those countries that first went on a sharp weakening of national currencies and received the advantage over time.
For the sake of fairness it should be noted that the "Devalvation parade", which occurred at the end of 2008 - the beginning of 2009. Allowed part of countries due to the cheapness of national currencies, if not to keep growth, then, at least, mitigate the economic downturn, by increasing the competitiveness of its own products in foreign markets and import substitution on the internal. Therefore, to reproach the countries that are the first to go to the real devaluation of national currencies, it is possible only from the positions of globalization.
Currency courses are often perceived as a thing of deeply financially in its essence, having a little attitude towards the real economy, although it is the currency courses in many respects determine the configuration of world trade and competitiveness of goods in world markets. In this sense, currency wars, that is, the devaluation of currencies relative to each other is the first step towards disintegration economic SystemBecause they are an integral part of even more terrible to globalize the phenomenon - trade wars, with the establishment of protectionist trade barriers to those countries that are still able to independently provide much of their own needs.
For modern us financial system - this is a kind of apocalypse, since the final termination of the globalization process means the end old system interaction between countries.
Positions of the United States, Japan, China and Brazil are a confirmation that currency wars have already begun: these countries have already moved from words to specific actions.
In September, the currency interventions of the Central Bank of Japan began, officially announced that these are antideofering measures aimed at weakening the yen course, overly fortified to other currencies. The Japanese economy is exported and for it an excessively fortified national currency is a catastrophe, since it reduces the competitiveness of products produced in the country in foreign markets. Changing the yen course for 2 years of crisis was quite essential: Jena strengthened to US dollar from 100 yen for $ 1 in 2008 to 85-90 yen per dollar in 2010, which for the Japanese economy's long-term deflation is a rather negative factor . Naturally, Japan's actions caused a squall of criticism from representatives of other countries, first of all, one of its main trading partners is the United States.
Russia is not involved
Here it is necessary to clarify that the devaluation of the national currency can be achieved by selling it on foreign exchanges or an understatement of the accounting rate of the Central Bank. According to economists, this practice spread during the financial crisis can lead to an increase in instability on international market and complicate the coordination of efforts to overcome the decline, especially against the background of the concerns of a new slowdown in the economy.
Forecasts for 2013.
The strongest planet economies will continue to strive to reduce their currencies to stimulate internal growth, which can provoke a negative reaction from the developing world, the head of the Bank of England Mervin King is convinced.
"I think 2013 will be difficult: in fact, we will see how a number of countries are trying to reduce their exchange rates. This will definitely cause fear. Do other countries respond to the same spirit? What will happen? Policy implemented by countries in order to protect their domestic market He leads to general tension, "King said in an interview with The Wall Street Journal after speech on this topic in the economic club in New York.
As the edition notes, King's comments usually attract attention, since, on the one hand, the Bank of England is known for its innovative approach to regulatory activities, and on the other hand, his chapter uses constant authority among representatives of other central banks.
Therefore, the king concerns about the newly threatening world of currency wars will most likely be taken into account and regulators and markets.
Nevertheless, currency wars are only one of the manifestations of the global imbalance of the planet's economy, the head of the British regulator believes. According to him, it can be partially explained by the fact that countries with a significant traffic balance surplus (Germany, the Netherlands, China) need to stimulate domestic demand, but they have no goal to do it quickly. At the same time, other states whose significant deficit in foreign trade must quickly stimulate economic growth, but the choice of mechanisms for this is extremely scoop.
Regarding the British economy, King voiced a number of concerns related to the further growth of the volume of stimulating programs, first of all, bond redemption programs for 375 billion pounds (more than $ 600 billion). He did not, nevertheless, completely discard the possibility of such an expansion of incentives, but warned that their future efficiency would be weaker.
It should be noted that King will finish work as the head of the Bank of England in June of the coming year, he will change his chairman of the Canadian Central Bank Mark Carney - the first foreigner at the head of the British regulator.
Earlier it was reported that the decline in economic activity in the eurozone was less pronounced in November 2012, which was previously assumed, although the instructions for the fact that the region will come out of the recession soon, there is practically no.
James Ricards "Currency Wars"
James Ricards (American lawyer, economist and investment banker with 35 years of experience in capital markets for Wall Street. He is a writer and a permanent commentator for finance.) In his book "Currency Wars" outlined the four possible scenarilation of the current currency war, which called "Four riders of the dollar apocalypse."
He wrote that: in the first case, this world is several reserve currencies, where the dollar is only one of several. This is a preferred academic solution. This scenario suggests that all currencies will be in good relationship with each other. However, in fact, instead of one loose central bank, we will have such several;
in the second case: these are global money in the form of a special borrowing. This is a preferred solution for global elites. The basis for this is already laid and ready infrastructure. The IMF will whiminate its own printing machine under the unable control of the G20 countries. This will reduce the status of the dollar to the role of national currency, since all important international translations will be nominated in SPZ;
in the third event: this is a return to the Gold Standard. It must be implemented in a much higher monetary assessment to avoid a deflationary error of the 1920s, when countries returned to gold;
in the fourth case: chaos and emergency economic measures. I consider this option is the most possible due to a combination of negation, postponement for later, and issuing the desired for the valid by the money elite.
Also, Ricards writes that industrialized countries twice launched vicious dollar cycles on the planet in the 20th century. The first currency war was the restoration and collapse of the Golden Standard in 1921-1936, which played a role in the Great Depression. The military invasion of Nazi Germany and imperialist Japan followed him. The second currency war he calls the period after refusing the Bretton Woods of the dollar binding to gold, which ended with economic shocks and sent the world to the inflationary spiral in the 1970s.
"In the devaluation of the currency of the developed world, they accuse the quantitative weakening, it entails serious breaks in world foreign exchange markets. China artificially restrains the strengthening of the yuan to cope with these imbalances, and Brazilian Real successfully goes into new atmospheric layers. "" The concerns grow that world currency war may begin in this situation; Such countries as Brazil are louder and louder express their discontent. An obvious sideproof is the rise in prices for raw materials; The inflationary consequences of this phenomena are imported into developed economies, "said Andrew Wells, head of investment in fixed-income securities in Fidelity International. Prices in the UK and the rest of Western countries are growing prices, and rapidly growing economies, meanwhile, fear for their The manufacturing sectors who will have to pay for strengthening the currency. In the short term, the status of a refuge currency or a favorite asset for speculative investment seems to be a privilege. Foreign investors Buy real estate enriching its owners almost overnight. Residents with a high income can travel and shopping in stores, while on the same amount of their currency can now buy more. Import prices are incredibly low because the growing cost of the currency allows you to buy more foreign goods.
This is a practically exact description of Great Britain in the mid-1990s, many analysts come to the conclusion that the collapse of the manufacturing industry in the leiborists occurred exclusively due to the fact that one pound cost two dollars. Economists call it a "Dutch disease" - in the 1960s sector of the Holland's manufacturing industry came into decay against the background of the development of the gas industry and the currency growth that followed him. The rapid growth of the Australian dollar inflicted on the industrialists of Australia a crushing blow. It became clear last week when BlueScope Steel, the largest steel enterprise, reported on their plans to close half of the workshops, stop exporting and reduce 1000 jobs. Having reached the bottom at the height of the financial crisis at the level of 60 cents, the Australian dollar rose by 70%. Now he is trading in the area of \u200b\u200b1.04. Last month, the maximum of the last 29 years was tested at 1.10.
"Growing the mining sector, there are all the time qualified personnel, infrastructure, we enjoy record volumes even in the context of the growth of the Australian dollar, but at the same time other sectors of the economy suffer," she said to reporters. "On this basis, it should not be concluded that in the future we will cease to be a country that produces goods." In the same situation, the manufacturers of Japan were also, where the yen rose against the dollar by 10% over the past year. Glen Unetak, a currency dealer from MoneyCorp, notes that traders are wary of the countries that do not respond to the financial crisis. According to him, the inability of the American economy to create jobs and grow for investors to abandon investments in dollar assets. Recent growth of employment level is not enough to change these moods. If such countries like Brazil begin in unilaterally prevent the growth of their currencies, introduce restrictions on capital movements, will suffer world Trade. Then you can forget about recovery.
List of sources used
James Ricards "Currency Wars" book;
several articles from the newspapers "rg.ru", "allbest.ru", and others;
http://fx-commodities.ru/category/gold/
