But that was in a bygone era, when every state had its own currency, its own ammunition to be detonated at the whim of its government. The rest—the real powers—heard the explosions in the distance, notched another mark on the handle of their economies, and carried on with their own business.
Today, globalisation has led us to a fully interconnected world, where there are only two major currencies (USD and EUR) and a couple of secondary ones (the yen and the pound). The rest are mere speculative sideshows (with apologies to the CHF or the Yuan and their artificial exchange rates). In this modern landscape, moreover, finance is more interconnected than ever. And we have seen this play out disastrously with the global spread of toxic assets. The global credit crisis has spiralled into a liquidity trap that it seems we will only be able to alleviate by inflating against the clock amidst a crushing depression.
At this point, I hear (read) some voices nostalgically calling for the peseta to be devalued, just as we used to do in the old days when things took a turn for the worse. The very Paul Krugman laments in his NYT blog that Spain cannot devalue. But doing so during a recession is not the same as doing so during an economic boom; it is not the same to devalue when debt levels are moderate as it is to do so unilaterally under the current circumstances M3, not at all (Note that the following chart covers the pre-crash period, i.e. up to June 2006). Who would want to invest in Spain by buying debt that could depreciate in an environment where that is not possible? And if that funding drain were to occur, Spain would be unable to finance itself at a critical moment. Improving our export capacity would be of no use whatsoever, because our economy would already be dead in the water.
Even so, some people recklessly lament the flexibility that a national currency offered in a 20th-century economy. But I don't think so, dit would no longer be feasible to assess, and not just because the euro has replaced the peseta or because it would deter investment. But also because if the EU as a whole were to devalue the euro, it would only make sense to do so against the $. Let me explain: to devalue a currency, it must be done in relation to others that serve as benchmarks – the currencies that lead the economy of the region. Nowadays, globalisation means we can no longer talk in terms of zones, regions or states; we must now adopt a global economic perspective. Therefore, when considering devaluing a currency, we must first identify at whose expense we are going to devalue it. And here we face the big problem: Which are the global benchmark currencies, the benchmark against which to devalue? Who is the dominant power, the driving force of the world today? We would never have thought that these questions might cause us to doubt, would we?
To those who believe that the world’s number one currency is the US dollar, and that the US economy remains the leading one, I would say that there are probably no better options than that, but that we arrived too late. The gradual devaluation – if we can call it that – that we have seen in recent months (and years) is that of the $ itself, particularly against the euro (and even cUsing the yuan as a strategy). And yet the US economic figures are still in freefall. The pound is also plummeting in the City, whilst the yen is paying the price for having been the whipping boy of the carry trade globally, particularly among investors in North American markets.
At this point, it is clear that both the USD and The GBP is depreciating de facto against the euro and the yen, thereby devaluing their currencies in the eyes of the EU. 
A Europe adrift economically in a scenario where its engine (Germany) has stalled and its transmission (Britain) has broken down; and also a Japan that is shedding a battered yen in a deflationary environment it has known all too well for two decades, and in which it knows how to navigate better than we do.
To speak, therefore, of devaluation, as this concept has traditionally been used, it is now obsolete in a world where The economy is supranational. Today, perhaps we should consider the ability of economic regions (as opposed to states) to devalue their major currencies at will. And in a situation as critical as the current one, we are faced with a kind of «foolish the last«. Others will prefer to see these falls in the USD and GBP as the fallout from the deteriorating state of the US and UK economies, as a form of collateral damage. But in reality, it is more a case of collateral benefit: a covert, new-generation devaluation underpinned by the EUR and YEN. And its effects are no longer as soothing as they were in the Era of Devaluations—far from it. But they will certainly be very harmful to the «the last fools» in this gloomy scenario.
The American Patient continues with prognosis uncertain whilst we Europeans remain at the foot of their bed. And some Spaniards look back fondly on those days of currency devaluations, when being the ‘tail-ender’ (Spain/Peseta) allowed us to make a reset in our beloved currency when we were up to our necks in water. But not now. Now we’re at the tail end of a lion (EU/€) that drinks from saucers of milk and licks the wounds of the American patient. The era of devaluation is behind us; today, it is the world that is losing value in a global ‘Corralito’.