U.S. Balance of Competitive Advantage
Strong currency is not strong and powerful country gold badge? The developed countries are waging a “garbage of the currency” movement, investors may become cannon fodder in wars of devaluation.
Yes, guns do not have eyes, but blew the horn of the United States have nothing to fear. Become the biggest winner’s confidence, the margin of its own come prepared. After the melee, the victory stood out, if not monotonous, and the lame in the generals or generals. Those flying stray bullet, innocent people inevitably accidental injury, but said the initiator of the war has never been firmly believe that this is necessary for the pursuit of higher interest expense.
Remember the beginning of the subprime mortgage crisis, Europe, Japan, China, against the common enemy ever seen it? Save a history of sub-prime crisis, the situation has now become a living textbook flip the United States.
Currently, the U.S. macro policy is very clear, it will not act hastily driven by global demand, it is a stag a horse to do an alliance war. China will be required from the world’s leading manufacturers, and instantly turned digestive capacity of the “eater”, and the dollar, will accompany its economic thill, from the troika of consumption to export, re-export back from the process of consumption , draw a rose after the first devaluation of the beautiful arc.
When the European senses, the United States called quantitative easing policy to help the United States and even Asia; China should wake up, I am afraid the beneficiaries trillion more in Europe and even the United States. As the author had ever discussed before, the United States, quantitative easing and China, unlike Europe, although the large-scale printing, but the locked cage credit, led the sincerity of China’s investment must not continue to loose, Enhancing strength has reached a critical moment.
Bank of Japan on October 5 announced that it will cut interest rates from 0.1% to 0 ~ 0.1% range, and said it would maintain the zero interest rate until the price stabilizes. The monetary policy, like policy flares, designed to allow people to see: how the money is worthless! Currently, the European high cost of sovereign borrowing, I am afraid will be striving to find a “demand” start the economy, it all ready for the second round of quantitative easing in the United States, means a great opportunity, can be Japan, Europe, the minister for its all strokes .
U.S. Treasury Secretary Timothy Geithner said that if the RMB exchange rate is not significantly raised, the U.S. government will use the “tool set” to promote the appreciation of the renminbi, also will join the European and other countries to persuade China to appreciate.
In fact, promoting the devaluation, the United States is a worthy example. Recently, multi-country currencies, primarily the United States will have to start again for the quantitative easing policy is expected to suppress the dollar. The future, in addition to “inadvertently” to drive down the currency, national currency of the possibility of competitive devaluations followed a significant increase in unilateral intervention may be emerging, trade protectionism is also bound to rise.
The 7th Australian dollar against the U.S. dollar Australian dollar rose to 98.71 U.S. cents 1, the highest exchange rate controls in 1983 after the end of the highest level, including the Japanese yen, Brazilian real and the Korean won, including multi-currency also showed continued strength of the recent potential, even if the financial crisis hit in Europe, the euro exchange rate of 7 also reported $ 1.3913, approaching the high point in eight months.
The shadow of the currency war, 187 International Monetary Fund (IMF) members gathered in Washington to attend the World Bank and IMF annual meetings. U.S. Treasury Secretary Timothy Geithner down again, do not criticize the Chinese exchange rate.
Last Friday night, G7 finance ministers at the meeting to urge the consensus on yuan appreciation. People’s Bank of China Governor Zhou Xiaochuan countered that reflect national financial crisis, “should look for their own problems, rather than just criticize others.” Reiterated that China’s pace of implementation of their own exchange reform, “We still believe that China needs to build market-based exchange rate mechanism, but the difference is that we want to reform step by step, rather than shock therapy.”
U.S. confound right and wrong, a considerable gain the initiative. When the world wanted to join the currency depreciation in the queue, we all know, to lose its meaning. The United States understand that a target to launch a proper queue, in the interests of the common driven, most likely to form a unified coalition.
The United States hopes to harvest, not short-term boost of devaluation on exports, but the pace of internationalization of the RMB disorders, Zou Bude long way. Subject to challenge after the subprime crisis in U.S. dollars, will regain the status of long-term stability.
Recalling the history of Japan and Germany, can clearly see, the Japanese yen and German mark in the late 70’s, 80’s appreciation, both Japan and Germany did not bring about the disappearance of surplus with the U.S., it does not solve the so-called global imbalances. In Germany and Japan who can not come to pass, the body is the same in China.
The future, Asian central banks need to guard against a new round of capital inflow, the risk of rising asset prices further strengthened, may lead to market volatility.
The U.S. real estate will become the main signal of U.S. monetary policy, found solid support before continuing down the interest rate would be the established policy of the United States, no matter what the release of positive economic signals that will not change.
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