China Daily: "The World May Have To Endure A Currency Flood"
February 20, 2013 • 11:29AM

The Government-run China Daily, in an unsigned editorial, Monday, on "Monetary easing," says that, given results of the just concluded G20 conference, "the world may have to endure a currency flood as the developed countries resort to currency printing to float their economies..."

"Following the US' quantitative easing steps last year, Japan started to pursue an 'open-ended' policy of monetary easing this year... The market is now waiting to see whether the euro will follow suit."

Regardless of whether such "easing" can bring even a temporary recovery, China Daily warns that this policy in the US, Japan, and likely Europe, "is set to bring shocks to the developing and emerging market economies."

It is the responsibility of the non-developed countries to defend themselves, rather than expect a change of policy, the editorial says. "It is high time the developing and emerging market economies coordinated to figure out solutions and lessen the potential shocks brought by changing external monetary conditions.

"At the same time, the self-centered developed economies must be aware that they, too, will suffer once the emerging economies stumble."

Thailand, a smaller South East Asian country that has made significant progress in industrialization, development, and the raising of living standard, but still confronts a multitude of difficulties, expresses itself similarly in an editorial in its English language The Nation paper.

"Top leaders of Russia, South Korea, Germany, Brazil, and China have all expressed their concern over the currency moves, which drive up the value of their currencies and undermine the competitiveness of their exports. If they decide to enter the game — like Veneuzuela, which has devalued its currency by 32 per cent — the world would be plunged into competitive devaluations. At the end of the day, competitive devaluations would lead to run-away inflation or hyperinflation. Nobody will win with these currency wars."