In the Newsweek Peter Tasker writes that the:
- History agrees. The last time deflation spread around the world, in the 1930s, the countries that came off the gold standard the soonest—equivalent to devaluing your currency, in today’s terms—recovered the quickest. Those that stuck the longest to the high ground of economic orthodoxy,
Franceand the , plunged into depression. That’s why even the sober Swiss are trying to depreciate their currency. True to form, the United States U.K.and the prefer methods that are less blatant. Bank of England governor Mervyn King crafted a quantitative-easing (QE) program that created new money equivalent to 15 percent of U.K. GDP. The subsequent decline in the pound he termed “helpful.” President Obama’s target of doubling U.S. exports in a feeble global economy could hardly be accomplished with a strong dollar. U.S.
- The problem is that currency depreciation is a zero-sum game.
says that a big revaluation of the yuan would do serious damage to its economy, which is probably true. China ’s critics say the undervalued yuan destabilizes the rest of the world. That’s true, too. China