“I would not want to be in machine tools in Germany at the moment,” said Adam Posen, president of the Peterson Institute for International Economics and a former Bank of England official. “I would not want to be in ship building in South Korea.”
The feeble recovery is tempting countries to weaken their currencies (by printing money):
But this works only if you are the only country doing it. If rivals also weaken their currencies, the net effect is zero, a type of prisoners' dilemma.
Top finance officials trying to talk down the value of their exchange rates have resurrected warnings of a global currency war. Such tit-for-tat devaluations tend to create short-term growth at other countries’ expense.