Bernanke Bludgeons China With Inflation in Currency War: Books
By James PressleyWe’re in the throes of Currency War III, and Ben Bernanke has won the first offensive by flooding China with inflation.
If this sounds like a geeky online game, recall how Chinese prices surged after the Federal Reserve unleashed its quantitative easing in 2009 and 2010, one of many moves James Rickards parses in his somber book, “Currency Wars.”
“It was the perfect currency-war weapon and the Fed knew it,” he says, describing how the Fed’s expanding money supply forced China to print more yuan to maintain its peg to the dollar. “China was now importing inflation from the United States through the exchange-rate peg after previously having exported its deflation to the United States.”
... What will this war mean for the power and prestige of the dollar, the world’s dominant currency? Rickards runs through four scenarios, which he ominously dubs the Four Horsemen of the Dollar Apocalypse...
Backgrounder: What's behind the currency war?