Brazil’s finance minister coined the term “currency wars” in
2010 to describe how the Federal Reserve’s quantitative easing
was pushing up other countries’ currencies. Headline writers and
policy makers have resurrected the phrase to describe the
Japanese government and central bank’s pursuit of a much more
aggressive monetary policy, motivated in part by the strength of
the yen.  The clear implication of the term “war” is that these
policies are zero-sum games: America and Japan are trying to
push down their currencies to boost exports and limit imports,
and thereby divert demand from their trading partners to
themselves. Currency warriors regularly invoke the 1930s as a
cautionary tale. In their retelling, countries that abandoned
the gold standard enjoyed a de facto devaluation, luring others
into beggar-thy-neighbor devaluations that sucked the world into
vortex of protectionism and economic self-destruction.  But as
our leader this week argues, this story fundamentally
misrepresents what is going on now,