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Impetus for Intervention: Not So Good for Global Trade

Over the past month Ben Bernanke, the Chairman of the Federal Reserve, has pitted his fellow central bankers against each other in what is being labelled a ‘currency war’.

His decision to extend QE3 by printing money rather than issuing short-term treasures has further debased the US dollar against most currencies. In doing so Bernanke has revealed his tenacity in devaluing the currency to stimulate exports in pursuit of his mandate of full employment. Unfortunately, what seems to be in the national interest may not necessarily be so for the global economy.

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