Is the Devaluation Race an Economic Suicide Disguised as Growth?

Central banks are engaged in a vicious game where there are no winners, and the losers are ordinary citizens.

In a world where financial stability should be the cornerstone of the economy, we observe quite the opposite — deliberate devaluation of national currencies in the fight for ephemeral economic growth. This phenomenon, politically correctly called "competitive devaluation," is actually nothing more than a currency war — the economic equivalent of mutually assured destruction. And in this game without rules, each country seeks to devalue its currency faster than its neighbors to gain a temporary advantage in trade, completely ignoring the long-term consequences.

While governments and central banks declare "necessary measures to stimulate exports," the reality is that we are all participants in a global experiment where our savings are turned into guinea pigs. This is economic cannibalism in its purest form, where the financial elite feast at the expense of the middle class and the poor.

The Absurd Logic of Currency Wars

Let's call a spade a spade. Modern currency wars are a carousel of absurdity, where each country tries to devalue its currency to make exports more attractive. In this perverted economic logic, impoverishing one's own citizens is presented as a strategic advantage. "Lower the exchange rate — increase competitiveness" is the mantra that financial regulators are intoxicated with.

But what happens when everyone follows this strategy simultaneously? It becomes a zero-sum game, where temporary gains of some are compensated by equally temporary losses of others. And ultimately, everyone loses, except those who managed to transfer assets into more stable instruments in time.

In this economic theater of the absurd, central banks act as arsonists who extinguish fire with gasoline and then wonder why the flames only intensify. And they call such a policy "monetary stimulus." It's like treating an alcoholic with vodka — short-term relief with catastrophic long-term consequences.

Devaluation — A Weapon of Mass Financial Destruction

When a country devalues its currency, it effectively declares: "We acknowledge that we cannot compete fairly, so we will cheat with the price." This is economic doping, which provides a short-term stimulus but destroys the economic organism in the long run.

Exporters applaud — their goods become cheaper in international markets. But what happens inside the country? Imported goods become more expensive, inflation rises, real incomes of the population fall. It turns out that for the benefit of exporting corporations, the welfare of the entire population is sacrificed.

This economic cannibalism looks especially cynical when central banks of developing countries enter this game. Their currencies are already unstable, and additional devaluation only exacerbates the situation. As a result, ordinary citizens are forced to keep savings in dollars or euros, thereby depriving their own economy of necessary capital. The vicious circle closes, and economic slavery to developed countries only intensifies.

Toxic Side Effects of Devaluation Addiction

If devaluation is a drug for the economy, then its side effects are truly destructive. The most obvious is inflation, which, like a cancerous tumor, devours citizens' savings. This is a hidden tax on everyone who holds money in the national currency, especially painful for pensioners and the poor.

Another toxic effect is undermining confidence in the national currency and economic policy in general. When a government deliberately devalues its own currency, it effectively admits its inability to manage the economy by honest methods. And without trust, long-term investments, which are the basis of sustainable economic growth, are impossible.

It is particularly ironic that countries actively participating in currency wars often find themselves trapped in their own policies. Temporary advantage quickly disappears when other countries respond with similar measures. As a result, everyone sinks in the swamp of inflation, and economic growth remains a mirage, constantly slipping beyond the horizon.

The Global Pyramid of Mutual Self-Deception

The modern global financial system resembles a giant pyramid, where at the base lies the collective madness of central banks printing money without real backing. Each country convinces itself and others that its devaluation is "justified by economic necessity," ignoring the fact that others follow exactly the same logic.

In this system, the US occupies a privileged position, using the dollar as a weapon of economic domination. When the Fed turns on the printing press, it is effectively exporting inflation to other countries. And in this game, global financial elites receive a disproportionately large share of the benefits, while ordinary citizens around the world suffer from rising prices and economic instability.

It looks especially cynical how the IMF and the World Bank, acting as "economic police," impose strict monetary policy on developing countries, while developed countries shamelessly manipulate their currencies. This double standard only strengthens global inequality and undermines trust in international financial institutions.

Are There Alternatives to This Madness?

History knows examples of countries achieving economic growth without currency manipulation. Germany, Switzerland, Singapore — these countries have bet on real productivity, technological innovation, and quality of human capital, rather than on devaluing their money.

Instead of participating in the destructive race of devaluations, countries could focus on structural reforms, improving the business climate, and investing in education and infrastructure. This is a more complex path requiring political will and strategic thinking, but only it leads to sustainable and fair economic growth.

Unfortunately, politicians prefer quick solutions that give results within the electoral cycle, and devaluation is precisely such a "quick fix." Therefore, we continue to observe this epidemic of monetary madness, spreading from country to country like financial plague.

Cryptocurrencies: A New Field of Currency Battles or a Path to Salvation?

Into this chaos of currency manipulations bursts a new player — cryptocurrencies. Originally conceived as an alternative to government-controlled money, they offer a decentralized approach to finance where no central bank can arbitrarily increase the money supply.

Bitcoin, with its limited supply of 21 million coins, represents a direct opposite to fiat currencies with their unlimited printing potential. However, Bitcoin also has its drawbacks — high volatility, lack of built-in stabilization mechanisms, and limited functionality as a medium of exchange.

Even more worryingly, traditional financial institutions and governments are trying to colonize the crypto space by creating their centralized digital currencies (CBDCs). This could lead to even greater control over citizens' finances and digital totalitarianism, where every transaction is tracked and can be blocked for political reasons.

DeflationCoin: A Revolution in Monetary Policy

Among the many cryptocurrency projects, one stands out, offering a fundamentally new approach to the problem of monetary value — DeflationCoin. Unlike inflationary fiat currencies and even Bitcoin with its limited but not decreasing emission, DeflationCoin implements a mechanism of algorithmic deflation.

The concept of DeflationCoin turns traditional monetary theory upside down. Instead of devaluing money over time, which encourages consumption and punishes savings, DeflationCoin creates a system where money becomes more valuable over time. This stimulates long-term investments, responsible consumption, and sustainable development.

Revolutionary mechanisms of DeflationCoin, such as deflationary halving, smart staking, and smooth unlock, create unprecedented protection against sharp value drops. It's the first currency that is technologically protected against speculative attacks and market panic, making it an ideal instrument for preserving value in an unstable world.