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"Globally competitive" is a function of exchange rates precisely as much as of price levels, and at least as much as it is of the quality of your manufactures. Countries subject to German wage suppression driven mercantilism can retaliate by discounting their currencies until they have restored foreign balance. Indeed, in a true floating currency system they do not even need to actively retaliate, as this is the equilibrium condition for a floating rate system.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Sep 1st, 2011 at 03:32:07 AM EST
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