Real USA & Currency Wars

USA Story

One of the countries in the world is characterised by extreme income inequality and health inefficiency.

Which country is this?

Someone may think this is the hall mark of an underdeveloped country. Well it could be.

However the above feature is attributed to US Economy, which is supposed to be the wealthy and robust and model of wealth distribution.

If you don't believe, please refer to financial times dated 23 Jan 2013. The link is given below (see the 5th para of the article)

http://www.ft.com/intl/cms/s/0/dd2d89f4-63c0-11e2-af8c-00144feab49a.html#axzz2IsbMUPSs

Whilst Obama is intelligent and took out US biggest threat Bin Laden without any loss of US life and that too in a foreign territory without their permission, USA's tryst with terrorists is far from over. They are expanding in Afganisthan and nearby areas and spreading across North Africa. Terrorists are taking classes on their ideologies, more terrosit teachers get recruited, more youngsters get trained and learning hatred which different from their ways and of course practices bombing techniques.

History may rate Obama as a Chamberlain if he continues to avoid strong policies and try containment or appeasement of terrorists - just as Chamberlain thought of Hitler

Currency Wars

Well currency is the invention of human kind for facilitating the exchange of goods and services. However, it has recently become a powerful political tool as well.

When USA thought Euro is going to a threat, so Goldman Sachs over financed Greece which spelled trouble for Euro. This trouble will end only with the collapse of Euro. Over-Financing Greece was a brilliant currency war strategy.

China's permanent currency – Renimibi - policy is keep it undervalued; but this has caused trouble for its arch-rival japan whose exports suffered in the past decade.

So finally Japan is taking an action as its exports suffered by the devaluation of Euro and Renimibi and other currencies of their competitors in exports.

Hence there is a possible battle of currencies in the horizon - Japan is facing accusations that it is trying to revive its economy at the expense of its trading partners (or competitors ?). Bank of Japan’s move to ultra-loose monetary policy is expected to invite similar action by other central banks - mainly by ECB. Within Eurozone, it is Germany who is concerned the most because they are the beneficiary of Euro and Euro vs. Yen disadvantage will impact Germany more than anyone else in the Eurozone. Italians muse the good old days of Lira which they could have devalued at their leisure and get more tourists or export their exclusive ceramics, etc. and increase employment in the country. Now they can't do that.

Well, has anyone heard Germany criticising about China's policy to keep its currency undervalued? We have heard about noises by USA on Renimbi undervaluation. This is because Germans export a lot to China. But USA faces lot of imports from China that killed several US industries, which in turn resulted in US unemployment.