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Currency war looms?

Business Times - 09 Oct 2010


Currency war looms?

US and Beijing politicians will need a lot of political courage to take economic steps that could prevent a new currency and trade war

By LEON HADAR
WASHINGTON CORRESPONDENT

AS finance ministers and central bankers from around the world gathered in Washington for the annual IMF and World Bank meetings, everyone was talking about the same topic - and it is not the weather.

To paraphrase Karl Marx: a spectre is haunting the global economy - the spectre of brewing currency wars. Unlike the talk over weather, when it comes to the exchange rate problem, economic officials suggest that they actually know what to do about it. Unfortunately, they seem to want the other guys to walk the walk, while they continue talking the talk.

The 'central existential challenge facing the world economy', is the way US Treasury Secretary Timothy Geithner described the currency issue last Wednesday. 'We believe it's very important to see more prog…