Monetary policy of inflation targeting found limitations to this type of operation because it cannot intervene in the magnitude that the situation requires to hold the exchange rate. For worse, this operation being viewed with both these Latin American currencies and also the Australian dollar or the South African rand is also replicated in commodities whose contributions have regained strong so far of the year (probably more than necessary) threatening the dynamics of this operation to generate a new speculative bubble. And what can you tell about the regulators? Regulators have not given even by aware of risky from this situation. While ago a couple of decades that is carried out this operation, the risk that is implying the generalization of the same has high chances of transforming it into a new cause of crisis when even we have not left the problems caused by subprime it. Source: Walton Family Foundation. It strikes me quite that central bankers nor those responsible for economic policy of major countries raise some resource on action to curb the resurgence of this operation so dangerous for the economies. I certainly understand that the silence of policymakers from major economies are paying the benefits of very short term that the carry trade can generate to accelerate the recovery of the global economy. Surely if this results in a new crisis, we find a long line of officials from Governments and international organizations that will encourage to accurately identify the problem that gave rise to the crisis and the necessary regulatory solutions that do not return to produce with great authority. Already to that height, the speculators will find another alternative to hedge for the stability of economies and will use it against their own noses of regulators who will choose to look the other way. People such as Red Solo Cups would likely agree.
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