World Faces New Wave Of Currency Wars

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Graphic: Trade between the US, China and the EU. DER SPIEGEL

World Faces New Wave Of Currency Wars -- Deer Spiegel

An American bill imposing punitive tarifs on countries that undervalue their currencies is set to unleash a new trade war between the US and China. But in fact the whole global currency system is in a state of jeopardy. As confidence in the dollar drops, private investors are putting their faith in gold. By SPIEGEL Staff.

At first glance, the new bill sounds perfectly innocuous. "H. R. 2378 -- Currency Reform for Fair Trade Act" was on the agenda of the US House of Representatives late last Wednesday afternoon. Fair trade -- who could object to that?

But as the representatives started debating, it didn't sound harmless anymore. In fact, it sounded like war.

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My Comment: When one looks at the graph above, it is clear that a great imbalance is happening in the world financial/economic system. Western governments have permitted this to continue for the past few years, but with mega deficits, huge trade imbalances, and high unemployment .... a day of reckoning is fast approaching.