Reuters blog archive
By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The G7 has spoken about the troubled foreign exchange markets, and the world is marginally less secure for it. In Tuesday’s four-sentence statement, the finance ministers and central bankers of the world’s leading economies managed to ignore the problem of inadvertent competitive devaluations, contradict themselves and make an empty promise.
The G7 endorsed a “domestic” orientation of monetary and fiscal policies. That pleases the United States, Japan and the UK, all of which are pumping vast quantities of money into the economy in the as-yet vain hope that companies and households will spend and invest enough of the new funds to push GDP growth up and unemployment down.
But the endorsement misses the point. While domestic policymakers may see the cheaper dollars, yen and pounds as no more than a welcome by-product of their stimulus efforts, other trading partners - including the euro zone - see a cross-border flow of monetary pollution. They will take no comfort from the commitment to continue not to care about the international consequences of domestic policies.
from Raw Japan:
Japan’s best known retail currency trader, a housewife who made 800 million yen ($9 million) on the dollar, euro and pound, warns there is no such thing as easy money and investors must work hard and educate themselves not to get caught out in the volatile market we see these days.
Nicknamed the “kimono” trader by foreign and Japanese media, 61-year-old Yukiko Ikebe says many retail traders in FX margin trading lost big money late last year when Lehman Brothers collapsed and the yen soared broadly on safety bids.