Interesting information that you need to know about our economy and the volatility of the dollar. We cannot keep living in denial and think that we can go on this way without seeing some form of consequences. The day of reckoning is coming and we need to be ready for it.
What is QE2
Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a particular currency falls, so too does the real price of exports from the country. Imports become more expensive too, so domestic industry, and thus employment, receives a boost in demand both at home and abroad. However, the price increase in imports can harm citizens’ purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries.
Competitive devaluation has been rare through most of history as countries have generally preferred to maintain a high value for their currency; have been content to allow its value to be set by the markets or have participated in systems of managed exchanges rates. An exception was the episode of currency war which occurred in the 1930s. The period is considered to have been an adverse situation for all concerned, with all participants suffering as unpredictable changes in exchange rates reduced international trade.
What is G20 Summit
The Group of Twenty Finance Ministers and Central Bank Governors (also known as the G-20, G20, and Group of Twenty) is a group of finance ministers and central bank governors from 20 major economies: 19 countries plus the European Union, which is represented by the President of the European Council and by the European Central Bank. Their heads of government or heads of state have also periodically conferred at summits since their initial meeting in 2008.
Collectively, the G-20 economies account for more than 80 percent of the global gross national product (GNP), 80 percent of world trade (including EU intra-trade) and two-thirds of the world population. They contribute to 84.1 percent and 82.2 percent of the world’s economic growth by nominal GDP and GDP (PPP) respectively from the years 2010 to 2016, according to the International Monetary Fund (IMF).
The G-20 was proposed by former Canadian Finance Minister Paul Martin (later, Prime Minister) for cooperation and consultation on matters pertaining to the international financial system. It studies, reviews, and promotes discussion (among key industrial and emerging market countries) of policy issues pertaining to the promotion of international financial stability, and seeks to address issues that go beyond the responsibilities of any one organization. With the G-20 growing in stature since the 2008 Washington summit, its leaders announced on September 25, 2009, that the group will replace the G8 as the main economic council of wealthy nations.
The heads of the G-20 nations met semi-annually at G-20 summits between 2008 and 2011. Following the most recent summit, which was held in Cannes in November 2011, all future G-20 summits are to be held annually.