The Next Step In The Currency War: Capital Controls And Tariffs This isn't just a China-U.S. story.

This is getting serious. The currency war between the world's powers is expanding beyond the typical Japanese intervention, Chinese yuan pegging, and aggressive U.S. quantitative easing to include, "Brazil, Mexico, Peru, Colombia, Korea, Taiwan, South Africa, Russia and even Poland," according to Ambrose Evans-Pritchard.
But what does this mean, and why is it happening?
Essentially, all the easy money flooding the market through U.S. quantitative easing is making the dollar weak and increasing the value of other currencies. Japan is front and center here, worried one of its chief export markets could be priced out of purchasing its goods.
Simultaneously, it is making U.S. goods more competitive, which means emerging markets countries like China, Brazil, Mexico etc. al. need to move in to devalue their currencies against the dollar.
And this whole process spirals and spirals and spirals...until someone does something different.
That different approach could be capital controls, according to Ambrose Evans-Pritchard.


Read more:  http://www.businessinsider.com/currency-war-capital-controls-tariffs-2010-9?utm_source=Triggermail&utm_medium=email&utm_term=Business+Insider+Select&utm_campaign=BI_Select_092910_Personal

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