Currency war

It is not unknown the great Chinese economic growth, but maybe is not so known the cold war which is being fought between USA and China due to the currency devaluation to increase their exports.

Some specialists do not want to call it war, but the truth is that the “old red phone” is now of the hook

United States has been living above its possibilities, its expenses were much higher than its returns, however, now is trying to save, but the consumption is lower, for that, exporting is so important, to keep the economic growth, that is the reason why USA is trying to devalue the Dollar, to make it cheaper for the other countries and make their purchases in America cheaper.

At the same time, the Dollar devaluation is not in the interest of China, because its currency would be more expensive and its exports will decrease and it will have to increase the intern consumption and save less that is why China is also trying to devaluate the Yuan and buying American debt, and here is another reason why the Americans do not want the dollar to increase its value, because they will have to pay less for its debt.

Summarizing, China wants to devaluate its currency, other Asian countries which do not want to have a disadvantage (including Japan) are doing the same, USA does not stay behind, so, who is losing more in this war is the Euro because countries like Greece, Spain, Portugal, Ireland and Italy do not want a revaluated Euro, because the need to export to avoid their economic problems. If the Euro price increases, they sell less. In this war, nobody wants to lose.

Let’s hope this war to finish, because the history tells us that in the thirties, the consequences of a similar war were not very positive.