Reply To: Switzerland and Britain at currency war


Yes you are right. But devaluing currency is, unfortunately, not meant to benefit the average person. This type of currency manipulation is a direct result of too powerful a government. It allows politicians to do things that benefit the politically well connected businesses and banks. That, in turn, gets campaign contributions and lobbying money to go to those politicians from those businesses and banks.

This kind of policy is not really fought against by the general public because those politicians and their pocket economists are able to convince them that their policies are causing aggregate economic indicators to get better. GNP and other aggregates goes up. Politicians, to an extent, also believe that simply having high GNP and other aggregate numbers is a sign of a god economy and follow the Keynesian by-any-means-necessary approach to get to these numbers without looking at the unseen consequences. But, as you know, those indicators really mean little if anything when it comes to purchasing power and quality of production and investment.

Unfortunately the general public doesnt really have a good understanding of purchasing power and quality of production and investment….and, for some reason, they tend to trust their politicians.