When it comes to global currency warfare, one can read countless books (all of which professing to be the definitive reference guide for a process that started in the... 1930s), or one can fast forward, save lots of time, skip all the repetitive verbiage and simply observe the following charts which summarize the key things "one needs to know" about the dead-end that the globalized monetary system has found itself in since 2008, when the entire world decided that the only way to "fix" all of the world's problems is simply to print a countless amount of paper money.
What Is A Currency War?
What's Actually Strong/Weak?
Who Uses What Currency Tools? (click image for full-size legible chart)
And Just How Big Are The Interventions?
Not all currencies can depreciate at the same time. At least one currency has to appreciate if all others depreciate. But everyone is trying it - as global rates have the lowest standard deviation on record (i.e. everyone is lowering rates and keeping them there).
On a global scale, competitive devaluations are therefore impossible and may even pose a risk of escalation towards protectionism.
Maintaining a non-cooperative equilibrium is a challenging exercise. Not only will every individual partly have to constantly monitor what everyone else is doing, but in addition, there is a constant risk of escalation into protectionist policies. Trade disputes are already on the rise. The number of WTO dispute cases in 2012 was the highest in 10 years.
Finally, the extensive use of macro prudential policies and capital controls as observed in recent years poses the longer-term risk of misallocation of resources.
Source: Goldman Sachs