Commentary
The decline of the British pound has far-reaching implications for the global economy.
The near crash of the British pound last month is just one of many such stories of declining currencies and central bank intervention taking place around the globe. It serves as a frightening harbinger of a major economic crisis to come. The dollar has hit a 20-year high. Nearly all other currencies are depreciating, and the steps governments are taking to defend their currencies are inflationary. Countries are spending down their dollar reserves and purchasing their own currencies, but commodities, oil, and energy are all priced in dollars. Foreign debt also has to be paid in dollars. Therefore, depleting dollar reserves will make these international payments more expensive….