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In 2010, Brazil’s Finance Minister, Guido Mantega, coined the phrase “currency war” when he complained about the “cheap” Chinese yuan. Mantega claimed this gave China an unfair trade advantage. As he put it to the Financial Times, “we’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.”

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That was then. Now the Brazilians are conspicuously silent because the shoe is on the other foot. The Brazilian real has lost a whopping 25 per cent against the yuan since January 2015. The currency wars continue and are every bit as intense as they were back in 2010, when Mantega coined the phrase.

But, the conventional wisdom about the wonders of weak currencies long predates Mantega – economists and political leaders have been deceiving the public on the advantages of currency devaluations for centuries.

The advertised goal of a devaluation is to increase the price of foreign produced goods and services and decrease the price of domestically produced goods and services. These changes in relative prices are supposed to switch domestic and foreign expenditures away from foreign produced goods and services towards those produced domestically. This is supposed to improve the devaluing country’s international trade balance and balance of payments.