Federal Reserve Chairman Ben Bernanke's remarks today the logic for the use of quantitative easing deflation, fear deflation. This recent economic data from the U.S. to see support for the U.S. core inflation rate has been negative, excluding crude oil commodity procurement, residents showed downward trends in commodity CPI.
In my opinion, the Fed introduced the quantitative easing policy, which is based on the consideration for the U.S. economy in transition. 70% share of the U.S. economy through domestic demand, mainly consumption, and consumption have relatively partly achieved through consumer credit. However, at the background of high unemployment and depressed real estate prices against the backdrop of the stock of wealth, U.S. consumers have been limited and incremental revenue through the means of consumption of tools to consumption-led economic development model being dead, the U.S. economy toward exports and investment. The quantitative easing policy, it is precisely these two areas of benefit.
Through the implementation of quantitative easing, you can maintain long-term interest rates low, which is conducive to economic development in the United States reduce costs and increase the U.S. domestic economy relative comparative advantage, and an export comparative advantage. I think this is the United States to implement the basic considerations of quantitative easing.
Therefore, the Fed introduced the quantitative easing policy, in Bernanke's theory of logic and economic thought, the core is deflation. Judgments according to Bernanke, the main contradiction in the current global economy is not inflation, not economic overheating, but deflation, the economy cooled.
But the problem is that the U.S. economy accounts for only part of the global economy, Bernanke was very clear stand on developed countries, especially between the United States point of view, to view the problems, policy development, to lead the world opinion. This is precisely my question.
First, the current global economy, the pattern appears as one-third of developing countries, economic overheating and inflation; two-thirds of the economy shown by cooling the developed countries. A third, two-thirds of a proportional relationship, does not yield a global economic trends in the future will be cold and deflation.
Second, in order to prevent deflation in the developed countries, the developed countries to prevent a recession, sacrificed the interests of developing countries, which in itself is a mistake. Especially in a context of economic globalization, developed countries accounted for the high economic weight, but the low proportion of the population look to the interests of developed countries, one-way policy is worth the candle, this policy does not truly meet the global economic development needs.
Third, U.S. policy does not mean that the developed countries, but represent the United States itself. In fact, the Fed introduced the quantitative easing policy has been to Europe, Japan, Australia, Canada and other developed economies, pushed to a very awkward position. Introduced in Europe is still tightening. In fact, a new round of quantitative easing in Fed policy implementation, the developed countries outside the United States is likely to take the lead in stagflation, the economy has not recovered, but the influx of a lot of money cause prices, in other words, America is now implemented a new round of quantitative easing policy, it does not meet the overall interests of developed countries.
Fourth, in the new round of quantitative easing, the United States itself is difficult to make a profit. Because the U.S. economic model is characterized by the most typical consumer-driven economy, such a pattern is difficult to instantly change the exports as a lever of economic growth, which requires a very long transformation process. As of Chinese economy, reducing dependence on external demand, as the development of domestic demand. Economies in transition need to cycle three to five years, not one day be able to achieve, not Destructive Enthusiasm. The United States through a new round of quantitative easing policy to push down the dollar, as U.S. exports to enlarge, but the cost of production in the United States with the gap between developing countries is how many times, This is more than the exchange rate adjustment range. According to this logic, a new round of quantitative easing, the U.S. economy itself is very difficult to profit.
Fifth, in 2008 after the financial crisis, the world are thinking about, do not let the means to rescue the crisis, as the financial crisis pushing the next hand, do not prematurely induce the arrival of the next round of economic crisis. Academics of the reasons for the 2008 financial crisis, there is too much money, from the real economy, so the only means of crisis prevention is to reduce currency risk, not to let the currency inflated to the extent one can not control. In 2008, the 2009 crisis period, the temporary introduction of a number of loose monetary policy is possible, but today, the basic stabilization of the global economy, the U.S. economy is not deteriorating, such a circumstances, the United States launched the second round of the quantitative easing policy, is clearly a will to become an economic crisis triggered by the arrival of incentives advance. As capital flows around the world, the next round of financial crisis may occur outside the United States, but will be one in the place in the world. But at the end point, a means to rescue the financial crisis should not become the next round of economic crisis ahead of the arrival of the incentives.
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Article Added on Friday, April 13, 2012
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