From the report:
“European Central Bank President Mario Draghi called the euro’s strength a “serious concern” last week, and officials in Australia, Canada and New Zealand have been making noise about weakening their currencies for weeks, the Financial Times reports.”
Perhaps Draghi and other fanatical Keynesian central bankers should scrap their currencies and adopt the Zimbabwean dollar…or better yet the Confederate dollar of America’s Civil War. Wait a minute…even those currencies have some residual collector value…let’s just make money completely worthless, then we’ll all be rich!
There is no greater fallacy haunting the halls of central bankers these days than that devaluing one’s currency will spur one’s economy to greater production and prosperity. There is no way that one country can force another to subsidized its economic recovery, which is the underlying assumption in competitive currency devaluations. Rather, the devaluing currency zone experiences a transfer of wealth within its borders, from non-exporters to exporters, and another transfer of wealth to its trading partners who get valuable goods at bargain basement prices. Read my article on the subject.