Financial safety

Currency wars and the threat of deflation

The price at which you can trade American dollars for foreign currencies may seem abstract, but events unfolding right now make it important to your future income, whether you have a job and the direction of the world economy in the next few years.

Around the globe, we are seeing strong downward pressure on prices, especially for commodities, prompting some governments to make their currency cheaper relative to the dollar. That suggests we may be entering a period of deflation, last experienced in a serious way in the U.S. in the Great Depression of the 1930s and the late 1800s. A deflationary spiral would represent a serious threat to the global economy.