“When governments seek to manipulate exchange rates for competitive advantage, it rarely ends well,” White House economic adviser Larry Summers said at the Yalta European Strategy Annual Meeting this past weekend.
U.S. monetary policy is flooding the world with cheap liquidity, Nobel Prize-winning economist Joseph Stiglitz said at the Canadian Consulate’s “Invest in Canada” luncheon yesterday. Our current policy, he explained, acts as a competitive devaluation against emerging-market currencies. Stiglitz added that he is worried about the prospect of a currency war but conceded that there’s not anything we can do about it.
The Chinese renminbi is “substantially undervalued,” IMF Managing Director Dominique Strauss-Kahn said at the Yalta European Strategy Annual Meeting. But, he added, too often that’s used as an excuse by rich countries to postpone structural reforms that would restore competitiveness:
In an exclusive video interview, Ex-Car Czar Steven Rattner tells Chrystia Freeland that without government intervention via TARP the economy would be ”dust.”