In a depressed global economy, the best possible kind of war is “currency wars”—joint monetary stimulus from the major nations. And it looks like we’re getting some. In the wake of QE3 the Bank of Japan is suddenly worried about the high value of the yen and is kicking in some stimulus of its own.
For whatever reason, elites in almost all countries seem more comfortable talking about exchange rate issues than coordination of expectations so perhaps the best we can realistically hope for is that now the ECB will worry that the Euro is overvalued and kick in with some of its own expansionary policy.
