Are we about to see another version of the Plaza Accord, the 1985 event when leaders of major Western powers coordinated to depreciate their currencies against the yen?
From a reader:
So, in the rapidly unravelling Euro drama…who stands to lose the most economically with a continued collapse of Euro?…and who stands to gain the most by deploying their vast currency reserves to buy the Euro?…China of course
Therefore the looming unasked question is….Does China start supporting the Euro soon with significant intervention?…do the rest of G20 countries join in?…The G20 co-ordinated currency intervention scenario has not been discussed much…the Plaza Accord precedent to engineer currency moves to address global trade imbalances is out there…it may be just the thing, at a minimum, to stabilise the Euro and allow the Eurocrats in Brussels to save political face and at same time buy the Chinese and US time to work out their trade imbalance differences.
In the volatile FX business…you never see the bus that hits you.
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3556 Main Street
And for a sense of how that works out:
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