In the face of looming deflation in the developed world, it seems that economic policies are diverging all the more. When the financial crisis broke in 2007-08, most banks eased monetary policy significantly, but the trend changed in late October when the Bank of Japan, for one, stepped up its bond-buying. According to the Economist, this divergence seems likely to have a big effect in the medium term – and not least in the currency markets. As things currently stand in the global economy, the expression “every man for himself” seems to be most fitting.
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