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Currency wars and Cypriot woes

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  • The Wall Street Journal reports that this week's G7 finance ministers meeting is contemplating a comment on currency wars. So an irrelevant meeting will issue a statement on a non-existent problem. Taxpayers will doubtless rejoice to see their money hard at work in this way.
  • Asmussen of the ECB is in Handelsblatt suggesting that currency targets would not help France solve its economic problems, and daring to suggest that France's economic problems might be the result of French policies.
  • The Financial Times has mooted that one option for Cyprus might be for uninsured bank depositors to take a loss, and for 50% haircut to be applied to bond holders. This plan has not been endorsed by anyone, but floating it as a possibility will raise risks in the market.
  • Japan's government has been setting itself more targets - after the 2% inflation objective, the Economics Minister has said he wants the Nikkei at 13,000 by the end of the March. That could be described as "ambitious" (it is a 17% move). Actually, there are many words that could describe such a policy objective.

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