Sunday, November 21, 2010
Bernanke: Fed's right on stimulus, China
Bernanke's appears to be putting the pressure on China. Bernanke stressed at a recent conference that nations need to work together to correct the global economic issues at hand. He also defended the need for the $600 billion money supply increase against critics, including officials from Germany. He emphasized the high rates of unemployment were a significant problem that might helped by the money pump. Also, he reminded everyone that the FED also has the tools to scale back the expansionary policy when things improve. Certain foreign countries accused the U.S. as being somewhat hypocritical as their manipulation of the money supply causes the same results as China's policies. Nations need to cooperate as these situations become stickier and stickier.
Subscribe to:
Post Comments (Atom)
This article raises an interesting question. If the United States decides to increase the money supply by $600 billion, will this put them in the same category as China when discussing the issue of currency manipulation? I believe the primary reason for increasing the money supply in the U.S. is to combat the unemployment rate, where as China does not have similar reasoning.
ReplyDeleteI feel that bashing china for keeping its currency undervalued is not going to do much good.To be fair, there are other emerging market countries in the world as well who do the exact same thing.It seems to be working out pretty well for them. This "bifuricated" recovery where emerging markets are growing much more rapidly than their developed counterparts is proof that the US needs to the same things that these countries seem to be doing. That means currency manipulation is definitely on the cards and this monetary policy will do exactly that, therfore it is essential that this idea be supported
ReplyDelete