No Free Lunch

With the Fed, the Bank of England and recently the Bank of Japan engaging in massively expansionary monetary policy, central banks in South Africa, India, Australia, Poland, Korea, Denmark, Israel and elsewhere are lowering their interest rates too. They are doing this to stimulate growth and in some cases prevent their currencies from appreciating and hurting exports. To the extent it’s the latter, these actions blunt some of Bernanke’s objectives.