In a wider historical perspective, the current currency war is the latest conflict in a series of acute crises of the modern international monetary system. In a world of national monetary regimes based on fiat money without physical anchors, domestic monetary instability automatically transforms into exchange-rate instability.
Higher food prices set off the revolutions in Tunisia and Egypt and the mass protests in countries like Algeria, Jordan, Yemen, Bahrain, and Iran. People in these countries buy more unprocessed foods and spend a much higher percentage of their income on food, so they have been severely impoverished by Bernanke's QE2.
He has been saying things that sound surprisingly Austrian in regards to the limits of monetary policy.
The use of mathematics necessarily leads the economist to distort reality by making the theory convenient for mathematical symbolism and manipulati
If the newly elected budget "hawks" really wanted to impress us, they could refuse to raise the debt ceiling. Then they and their colleagues would have no choice but to start slashing.
One would think that being on the inside of many decades of careening one step ahead of monetary chaos might induce a sober, even cynical, spirit — that it might lead the insider to call for keeping one's metaphorical air-raid shelter well stocked and at the ready.
