Did Swiss Bank’s Franc Surprise Signal Start of a Currency War?

Currency wars have been predicted for years. Outright monetary battles were last seen during the Great Depression of the 1930s, when governments competed to devalue their currencies to gain market advantage. But since the return to floating exchange rates in the 1970s, the risk of renewed competitive manipulation has hovered over the monetary system like a dark cloud.
The only question, it seemed, was: who would be the main culprit? Would it be the United States, pushing around exchange rates through the machinations of the Federal Reserve? Would it be Japan, hoping to reverse years of stagnation by engineering a depreciation of the yen? Or might it be the eurozone, seeking an escape from its problems?
Who would have guessed that, remarkably, it might turn out to be none other than Switzerland—perhaps the stodgiest monetary power on the face of the earth? The Swiss franc has long been regarded as one of the world’s most dependable currencies, prized by investors as a stable and secure haven for their wealth. Yet a few days ago, with one bold stroke, the Swiss National Bank succeeded in severely destabilizing financial markets around the world.
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