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Speaking at the Asia-Pacific Economic Cooperation summit this weekend, President Obama chided China for not letting the yuan appreciate fast enough. "Enough's enough," Obama said, telling China start acting like the "grown up" economic power it's become. (See: Obama Says China Has "Grown Up" Economically. Has It?)

Meanwhile, GOP Presidential candidates have been trying to one-up each other on who will be tougher on China, with the notable exception of Jon Huntsman. "I don't know that this country needs a trade war with China," the former U.S. ambassador to China said during the CNBC Debate last Wednesday.

But trade wars with China - and other nations - are likely inevitable, according to Wall Street veteran James Rickards, author of Currency Wars: The Making of the Next Global Crisis.

Currency wars "have already begun," according to Rickards, citing comments from Brazil's finance minister in 2010. The Fed started this currency war with its initial response to the 2008 financial crisis and ongoing "extraordinary" measures. All the Fed's efforts - from zero interest rate policy to quantitative easing - are largely designed to weaken the dollar, putting pressure on foreign central bankers to competitively devalue their own currencies, according to Rickards.

Somewhat surprisingly, he believes the euro will be the ultimate "winner" of the currency war and notes the single currency has held up relatively well despite daily headlines about Europe's sovereign debt crisis.

Currency Wars & National Security

Historically, currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon's first-ever "financial" war games. While expressing confidence in America's ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into "asymmetric warfare," if currency wars lead to rising inflation and global economic uncertainty.

The good news is a 43.5% drop in China's trade surplus in the third quarter is a sign the country's policy of letting the yuan slowing rise is addressing trade imbalances between the world's second-largest economy and the U.S.

But don't expect this data point, or any other, to diminish heated rhetoric about currency and trade policies among the world's leading economies. Hopefully, the tough talk won't lead to something far more destructive.

For more on this, visit our Facebook page where Rickards tells us how and why China has been secretly purchasing hundreds of tons of gold via covert military operations.

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @aarontask or email him at [email protected]