RIP for globalisation?

" The dollar joins the currency war," writes Prof Nouriel Roubini. That is not really true because the US has been following a weak dollar policy since the financial crisis in 2008. First the US Federal Reserve reduced interest rate to almost 0% and, when that was deemed insufficient, it started to repurchase bonds, in what is known as Quantitative Easing. The result was a massive increase in money supply which weakened the dollar and was supposed to force banks to lend money for investment. Critics cried that cheap money would cause inflation but that has not happened so far. US inflation rate has turned negative for this year while the rate of inflation in the UK has fallen to zero, prompting legendary investor, Warren Buffet to comment," So far I have been wrong on interest rates..... It is hard for me to believe that you can drop money from a helicopter and not have inflation, but we haven't." The US economy has recovered, with unemployment down to 5.5% and the GDP expanded strongly last year, although it has cooled off in the first quarter of this year, possibly due to seasonal factors. Where the US led the Europeans were sure to follow. The European Central Bank started its own QE program in January, leading to a fall in the value of the Euro. Japan had started its own QE in 2013 which made the yen fall to 120 against the dollar. There were fears that other Asian countries will follow Japan and devalue their currencies so that their exports do not become more expensive in comparison. The Chinese government says that its exports are facing mounting pressures. Even with so much cheap money the global economy remains subdued but the flood of cheap money increased asset prices all over the world, making the rich even richer. The number of billionaires increased as share markets soared and the rich were able to borrow cheaply to increase their assets, while savers saw their wealth severely eroded by low interest rates. Yesterday, Fed Chair, Janet Yellen acknowledged that stocks are overvalued, leading to a fall in markets all over the world. Investors have turned to emerging market economies and even to small countries to get better rates of return on their money. Smaller economies have trouble handling large volumes of foreign capital. Cheap money only increases consumption, leading to inflation and asset price bubbles, especially in the property sector. This is what happened to India during the Congress decade. To deal with currency inflows the Reserve Bank has built up reserves to $344.6 billion which is good because foreign investors have started selling Indian stocks and this sudden outflow could cause the rupee to tumble. The rupee is trading at 63.89 to the dollar. When the IMF is supporting capital controls in certain circumstances why are our wise men even thinking of full convertibility for the rupee? Currency wars will lead to trade wars to greater controls. It is coming.