I don't think this is something I have written on before, but sure have been talking about it for the last 5yrs and it is starting to pop up in the financial press more and more.
Global Competitive Currency Devaluation refers to most every country/central bank attempting to devalue, weaken or talk down their respective currency to try to export some goods/services to pockets of economic strength in other nations and to also try to import some inflation. Remember, central bankers the world over are scared spit less about deflation, NOT inflation.
And why are we going to hear more about currencies and devaluation now? Because central bankers responded to the financial crisis with conventional monetary policy easing, then unconventional easing (QE 1, 2 and 3). Monetary Easing has largely run it's course and is the equivalent of a central banker pushing on a string so now the next arrow in their quiver is to devalue their currencies. And this becomes all the more important as the US and China still have some sort of economic growth that other countries want to spur exports to. (W won't debate the strength of the US or Chinese economies here, mostly because it is all relative to the rest of the world).
So these other nations start cutting front end rates to zero, and in many cases to negative, to weaken their currencies and spur some export growth to the US and China.
How does this affect capital markets and asset classes? Well the U$ is the most crowded long trade we have seen in a very long time as everyone is lined up for the U$ to continue to strengthen. If all these other currencies continue to devalue we think that Gold may be the recipient of natural demand. As these currencies devalue, investors will lose confidence in central bankers and these weaker currencies and will move to gold. We look to get long gold thru some specific producers we like. We also ask ourselves, all the time, what can upset the markets and the conventional wisdom...ie...what is the path of least resistance...because that is the path the market will take. For instance, if everyone is so long U$, what will upset that? Maybe the FOMC doesn't hike front end rates like every single analyst in the world thinks they will? The U$ will then surely weaken off and other currencies will strengthen. Bonds would rally. Maybe the US economy just can't grow with the soaring U$? Maybe Europe and other nations with weaker currencies actually start to improve as they get export traction to the US and China?
Bottom line--> Capital markets will largely be dominated by currencies now. One best understand how they work and have firm views on what will happen next.