全球货币战争（a global currency war）

Here's how this war is waged.

1.  To boost their economies, nations seek to raise their exports.

2.  To raise exports, nations try to make them cheaper for other nations to buy.

3.  To make their exports cheaper, nations devalue their currencies.

4.  To devalue their currencies, they print cash like there's no tomorrow.

It's a simple formula, but it has a fatal flaw.  It only works if you're the only one doing it. 

If every nation does it, every nation loses.  No one gets an advantage over others.  Meanwhile, the prices of goods and materials rise in all currencies, creating high inflation.

Nonetheless, the temptation to enter this war is too high to resist.  Any nation that stands on the sidelines will be damaged as other nations' currencies become cheaper.  The only way to defend oneself is to join the war. 

So far, China has stubbornly kept its currency undervalued.  Japan, Thailand, and South Korea have taken steps to stop their currencies from rising versus the U.S. dollar.    Brazil and Europe look like they're preparing to devalue as well.  As for the U.S., the Fed may start firing its next volley very shortly, in the form of quantitative easing that could drive our currency to new depths. 

Only one thing could stop this currency war, and that's if all the nations banded together and called a ceasefire.  But that's exactly what didn't happen at last weekend's G20 meeting.  Sure, everyone said they wanted to stop the war.  But they were unwilling to sign an actual truce. (From Stephen Leeb's e-mail)