Below is a summary, direct quotes, and misc thoughts of this great article by Grant Williams called War Games.
- This is a crazy world. Investors are buying government bonds at super low interest rates and basically taking a loss.Governments are reducing the rate of spending and calling it austerity and spending cuts.
- Central banks throughout the world are devaluing their currency. Do those fools really feel that if they devalue their currency, that other countries will just sit there and do nothing. Other central banks will devalue their currency and this will lead to massive inflation. Don't central bankers realize that?
- Guido Mantega, Brazil's finance minister,announced in 2010 that the world is in a currency war. 'We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness,' were Mantega's exact words. Mantega publicly stated what many central banks are saying privately, that the way to lift their economy is through currency devaluation.