October 01, 2003

The recent G-7 meeting was an extraordinary meeting. The U.S. persuaded the world's industrial powers to endorse flexible currency exchange rates. The move was clearly a jab at Japan and China as well as a signal to the world that the G-7 countries are willing to engage in mercantilists beggar–thy-neighbor policies that could lead to the ratcheting up of the worldwide inflation rate. The experience of the 1970's showed us that an unhinged monetary policy accompanied by deliberate monetary devaluations only leads to inflation and does not have a long term effect on a country's trade balance. It is sad to see the developed nations leading the world economy down the wrong path. If the G-7 communique has any effect on the world's central banks, the worldwide inflation rate will unambiguously rise.

You must have an active account to view these reports. You may register for a trial here

Download Complete Report in PDF Format

Download Complete Report in Word Format