Since the Fed announced it was going to buy a gazillion dollars of bonds, the US dollar is down about 5% against the yen. I assume these events are not uncorrelated, and that Sony et al aren't huge fans of the currency swing.
We've heard pretty much all parties and pundits say that a duel of devaluations should be avoided. What exactly is the precise definition of devaluation, and does this Fed program meet it? It certainly devalued the dollar somewhat, even if that was not the primary or stated goal. Would we get the same currency effects in a country that doesn't function as a safety perch? If not, does that mean these sort of bond buybacks are "fair", since most people can do them without breaking the devaluation code? Are monetary authorities "allowed" to devalue only as a consequence of doing other things to fight the recession?