Personal comment :

A year and half ago when G20 countries met in London to discuss measures aimed at coordinating their efforts to "restart " the economy and stabilise thw world financial system many of us underlined that further down the road there might be some problems to coordinate efforts when the time would come to coordinate efforts to ease down on QE and other measures needed to stabilise growth worldwide as things would improve .

It seemed obvious then the timing would differ for the different major players as the situation did not impact everyone in the same way , and everyone would try to defend their own interest first . The crisis exacerbated the changes that were affecting the world financial order prior to the crisis . For some of the emerging countries the crisis proved an occasion to challenge that order and increase their role as major world power . A very natural reaction based on the laws of nature and human behaviors .

It now becomes obvious we've reached the point where coordination of efforts is no longer a priority , as some are in a position to take advantage of the situation at hand to increase their position in the world order and profit from it , while others have reasons to fear the consequences of such a shift in the balance of power .

The currency war has now become the preferred weapon to take advantage of that situation and it's use is aimed at exports as well as a tool to reduce the value of their debts . The IMF is now becoming one of the battlefield where superpowers are being challenged , it used to be one of those international institutions where major powers could impose their will on others to gain advantages over them , but now a tug of war is threatening to turn the table around among that institution as emerging powers are fighting back on the currency war .

This will probably lead to a stand off for a while and leave countries and economic blocks to take a stand and take counter measures at a national level in order to gain whatever advantages they can .

In doing so we might expect a trade war to increase while countries will pass laws aimed at reducing further the worth of their currencies and protect their economy and job market .

This could turn ugly and counter productive over the next months while impairing world growth .

Tec