U.S. Financial World War: Bernanke defends QE2
Monday, 8 November, 2010 Leave a comment
I thought that this story may have a bit of life in it! Particularly if you subscribe to the view contained in the original article (Why (and how) the U.S. Has Launched a New Financial World War ) rather than naively go along with what is pushed out from Bernanke and the usual media channels.
Below is the word from the Beeb but I was also very interested to read this piece
The truth is, Quantitative Easing will not reduce unemployment, narrow the output gap, or increase aggregate demand. At best, it will lower long-term interest rates (slightly) and buoy asset prices. That may be good for the stock market, but it won’t lay the groundwork for a strong recovery. In fact, it might not even be enough to keep the economy from slipping back into recession.
Germany, China, Brazil and South Africa have criticised the US plan, with the German Finance Minister Wolfgang Schaeuble saying it was “clueless” and would create “extra problems for the world”.
China’s Central Bank head Zhou Xiaochuan has urged global currency reforms, while South Africa said developing countries would suffer most.
South Africa’s finance minister Pravin Gordhan warned that “developing countries, including South Africa, would bear the brunt of the US decision to open its flood gates without due consideration of the consequences for other nations.”
The US policy “undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis,” he said.
The heads of state and government of the G20 group of the world’s leading nations is due to meet in a week in South Korea, with currencies and trade imbalances high on the agenda.