First Ms. Lagarde and now Mr. Bernanke (in the recent testimony on Capitol Hill) assure us that there is no currency war happening. Well, that\u2019s true on the face of it.<\/p>\n
However, why do currency wars begin? Because they work. Initially. Unless you\u2019re willing to say the following that the populace of an advanced economy is going to sit back and watch their exports and by implication their jobs affected. But you might say \u2013 China has been manipulating their currency for at least a decade. <\/p>\n
However, I think the issue with China is that it serves primarily as a low cost manufacturer by default for most of the advanced economies. While each developed economy didn\u2019t particularly like the idea of currency manipulation by China, it affected each equally, more or less. This is quite different when each developed economy is trying to jumpstart their economies and boost exports by devaluing their currencies. The first few actors will benefit from this practice and the longer that these activities persist, the effects die down.<\/p>\n
But please be under no illusions \u2013 these are desperate measures that have pricing volatility effects on every supply chain.<\/p>\n
First Ms. Lagarde and now Mr. Bernanke (in the recent testimony on Capitol Hill) assure us that there is no currency war happening. Well, that\u2019s true on the face of it. However, why do currency wars begin? Because they work. Initially. Unless you\u2019re willing to say the following that the populace of an advanced economy […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,3],"tags":[451,102,453,436,454,452,450],"class_list":["post-453","post","type-post","status-publish","format-standard","hentry","category-government","category-supply-chain-management","tag-bernanke","tag-china","tag-currency-devlauation","tag-currency-wars","tag-exports","tag-lagard","tag-supply-chain-volatility"],"_links":{"self":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/posts\/453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/comments?post=453"}],"version-history":[{"count":0,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/posts\/453\/revisions"}],"wp:attachment":[{"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/media?parent=453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/categories?post=453"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/at-scm.com\/index.php\/wp-json\/wp\/v2\/tags?post=453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}