The world is revisiting the ghosts of the 1930s as currency wars spread

The world is revisiting the ghosts of the 1930s as currency wars spread. Sweden has cut interest rates below zero and launched quantitative easing to fight deflation, becoming the latest Scandinavian state to join Europe's escalating currency wars. The move comes as neighbouring Denmark takes ever more drastic steps to stop a flood of money overwhelming its exchange rate peg to the euro and tightening the deflationary noose. The Danes have cut rates four times to minus 0.75pc in a month to combat fall-out from the European Central Bank's forthcoming QE. Manoj Pradhan, Morgan Stanley's global economist, said the world is revisiting the ghosts of the 1930s as one country after another tries to steal a march on others by getting in devaluation first. The lesson from the 1930s is that those who do so early benefit at the expense of those who wait too long, he said. (VIEW LINK)