LSURussian LSU Fan Baton Rouge Member since Feb 2005 69353 posts Online
re: Can someone explain 'currency war'? (Posted on 2/25/13 at 11:02 am to Zach)
It's a media creation to dramatize something that's been going on for decades with little notice.
It refers to countries trying to stimulate their manufacturing industry and economy by lowering the value of their currency. That makes goods manufactured in their country cheaper in other countries and therefore, more likely for people in other countries to buy their products.
It also makes products made in other countries more expensive within those countries with a devalued currency so citizens tend to buy less foreign made goods and more domestically manufactured goods which again stimulates the manufacturing industry in that country.
Japan is actively pursuing that process now and has been for several months. China is notorious for keeping its currency cheap versus the US dollar.
Notro LSU Fan Alison Brie's Boobs Member since Sep 2011 4093 posts
re: Can someone explain 'currency war'? (Posted on 2/25/13 at 1:36 pm to rickgrimes)
quote: You mean print money?
Not necessarily. The Fed or any central bank could sell their countries currency they have in reserve and purchase another countries currency. Thereby increasing the supply of country A's currency and decreasing country B's supply.
quote: How does that affect inflation?
The way I think about inflation is too many dollars chasing too few goods. So if the money supply increases I would expect the prices of goods to increase as well. My two cents.