James Rickards: Currency War Has Started. I Expect The International Monetary System To Destabilize And Collapse. There Will Be So Much Money-Printing By So Many Central Banks That People’s Confidence In Paper Money Will Wane, And Inflation Will Rise Sharply.
February 5th, 2013
With Japan, China and the U.S. all pursuing weak-currency policies, other major economies are retaliating. The WSJ’s Deborah Kan speaks to James Rickards of Tangent Capital Partners about whether the drive to devalue will set off a trade crisis.
As developed countries like Japan and the U.S. try to kick-start their sluggish economies with ultralow interest rates and binges of money-printing, they are putting downward pressure on their currencies. The loose monetary policies are primarily aimed at stimulating domestic demand. But their effects spill over into the currency world.
Since the end of November, when it became clear that Shinzo Abe and his agenda of growth-at-all-costs would win Japan’s elections, the yen has lost more than 10% against the dollar and some 15% against the euro. The greenback last week plumbed its lowest level against the euro in nearly 15 months.
James Rickards, a veteran financier and author of “Currency Wars: The Making of the Next Global Crisis,” predicts the former.