Liquidity Swaps Presage Battle for Currency Supremacy

Since the eruption of the global financial crisis last fall, the world’s three largest economies — the United States, Japan, and China — have become very generous toward countries in need of cash, opening up a bevy of new bilateral currency swap arrangements. At first glance, this may seem to be a positive example of great-power cooperation in the face of a collective threat: The world’s economic powers are working together to provide liquidity to a global economy dying of thirst. A closer look, however, reveals that the intentions of the parties in question may be far more self-interested than […]