LONDON (MarketWatch) — Central banks around the world have tried just about everything to drag their economies out of recession. They have slashed interest rates to three-century lows, printed money in vast quantities, and recapitalized banks with soft loans.
So far, however, they haven’t had much success. Now they have one last weapon left in the armory — a currency depreciation.
All-out currency wars are now looming.
A series of central banks, both large and small, have begun to target a lower exchange rate as a way of boosting their economies. Read: The warning from the Bundesbank’s Weidmann about currency wars.
Whether it works remains to be seen. For investors, however, that may be less important than figuring out which countries will be successful in getting their currencies down — and which other assets will go up in value if an all-out currency war does break out.
Read More at Market Watch . By Matthew Lynn.