Pimco's Fels Sees U.S. Waging Cold Currency War of Words

The transcript discusses the ongoing cold currency war, highlighting actions by the ECB and BoJ to weaken the euro and yen, and the US's verbal response targeting China. It explores the potential impact of a weaker dollar and the upcoming G20 meeting, where global financial leaders will discuss currency strategies. The historical context of currency wars is examined, with a focus on the Shanghai Accord and the need for a new multilateral agreement to stabilize currencies.

What is a key characteristic of a cold currency war?

• It involves direct military intervention.

• It is primarily fought with words and covert actions.

• It requires immediate economic sanctions.

• It is resolved through diplomatic negotiations.

How did the European Central Bank influence the euro in the cold currency war?

• By increasing interest rates significantly.

• By removing the deposit floor for bond purchases.

• By implementing strict trade policies.

• By directly intervening in the currency market.

What is China's likely short-term strategy in response to US currency policies?

• To devalue its currency aggressively.

• To prop up its currency and avoid provocation.

• To increase tariffs on US imports.

• To engage in direct negotiations with the US.

What could trigger protectionist actions from the US according to the discussion?

• A rise in US interest rates.

• A new multilateral trade agreement.

• A decrease in global trade volumes.

• A significant appreciation of the dollar.

What historical event is mentioned as having led to a period of calm in currency wars?

• The signing of the Paris Agreement.

• The implementation of the Shanghai Accord.

• The establishment of the World Trade Organization.

• The introduction of the Euro currency.