The Fed’s decision to resort to quantitative easing for promoting investment and boosting the economy has sparked both positive and negative responses. According to this article, the policy has already engendered a drop in the U.S dollar against major currencies.
With a divided government now in place, it might be harder to stimulate the economy on a fiscal level but for now, the proposed monetary policy is already bringing some positive changes which may or may not be beneficial in the long run, because of fears that it might eventually trigger high inflation rates.
On the other hand, G20 member countries such as France, Brazil and Germany are against quantitative easing. Even if they want a strong U.S economy, they are afraid that a drop in the U.S dollar will be detrimental to their respective economy and they are concerned about the prospect that it might eventually cause high inflation rates.
Im torn on whether or not this is a good idea. We have extremely low levels of inflation as it is, but we do not want to circulate so much money that our dollar becomes so devalued that it would take too long to recover.
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