The game begins with one or more nations having economic imbalances while also experiencing significant economic growth. This leads to large investment but with nervousness about the future. Foreign exchange traders, sensing a big kill, attack the currency. The government, through the central bank, defends the currency. This can lead to extended rounds of back and forth between governments and traders.
Information flows affect outcomes.
Equity investors react much like foreign exchange traders and affect the situation. When foreign exchange traders and equity investors gain the upper hand, the government is forced to unpeg the currency leading to a large drop in value. This tends to feed on itself and produces even bigger declines. These declines engage the interests of the IMF, U.S. government, and affect the interests of TNCs and various groups in the nation. Further, declines in one nation send foreign exchange traders off onto other nations and this sets off a spiral of currency and stock market collapses.