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Global Political Economy - the shocks ahead

The World Economy seems to be heading towards a scenario of Currency Wars. Fingers seem to be pointed at the US and its strategy of QE2 to pull itself out of the recession...

"To deter this the US and Japan should refrain from QE2, even at the cost of lower US growth. An even better response, however, would be new regulations stopping western banks from speculating in foreign currencies, by using heavier reserve requirements or a short-term tax on foreign currency trades and options. Without such steps other countries will soon move to protect their currencies. If they do it will have been US policy short-sightedness, conducted without concern for its effect on developing economies, that will ultimately have isolated the dollar and its users."

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Undoubtedly Currency Wars are not good for the Global economy... but is there any other option available to the developed world????

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