Headlines using the term "currency war" have multiplied of late and, in the process, may have raised fears about asset bubbles and generalized inflation. Reinforcing such concerns are the links drawn between this so-called war, the Federal Reserve's quantitative easing and the rising price of gasoline.

For many inclined to worry about the long-term implications, the situation is all too reminiscent of the run-up to the great inflation of the 1970s. But before bracing for similar horrible events, it is crucial to note the differences between then and now, differences big enough to render a bubble-prone, inflation-plagued outlook neither an immediate concern nor inevitable.

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