Are we all doomed no matter what steps are taken?
Oct. 25, 2010, 8:04 p.m. EDT
Quantitative easing: The numberless oblivion
Commentary: âIf you print a trillion, Iâll print a trillion,â and other threat
BEIJING (Caixin Online) â The world seems full of smoke ahead of a world currency war. The weapon of choice is quantitative easing, a.k.a. QE. If you print a trillion, Iâll print a trillion. Of course, he and she will too. No change in exchange rates after a trillion? Letâs do it again, QE2.
The stimulus has failed.
How should one interpret the result? If you were Paul Krugman, you would say it wasnât enough. Of course, if 20% of GDP in budget deficit and another round of QE still donât work, he would say not enough again. You can never prove Krugman wrong. Such a smart fellow.
The problem is that all the others wonât follow this program. China could not move up its currency value too much. Otherwise, it would trigger hot money outflows, a total collapse of its property market and the banking system with it.
Japan isnât in a position to appreciate the yen much. Its industries have lost competitiveness to Germanyâs and even the U.S.âs.
The euro is surging by default. The European Central Bank seems to still be talking like the Bundesbank. But its position canât last through the next sovereign-debt crisis.
The U.K. doesnât need persuasion to embrace QE. It is like a big Hong Kong, all about stir-frying stocks and properties.
It seems that nobody wants to appreciate. Most major economies will do something to keep their currencies down. That is checkmate for the U.S. Without devaluation benefits on rising exports, QE just leads to inflation, first through rising oil prices. The American people are suffering from declining housing prices and high unemployment. If the gasoline price doubles from here, the country may not be stable. How would the elite react? Probably more of the same.
The world seems on course to another crisis in 2012.
The same people who caused the last crisis are still in charge. Theyâll get us into another. Iceland is taking its ex-prime minister to court for causing the banking crisis. Worse fates await the people who are causing the next crisis. China used to chop off the heads of its failing ministers at the capitalâs vegetable market. Maybe we should bring back the practice and globalize it.
:eek:
Full article:http://www.marketwatch.com/story/quantitative-easing-the-numberless-oblivion-2010-10-25?pagenumber=2
Oct. 25, 2010, 8:04 p.m. EDT
Quantitative easing: The numberless oblivion
Commentary: âIf you print a trillion, Iâll print a trillion,â and other threat
BEIJING (Caixin Online) â The world seems full of smoke ahead of a world currency war. The weapon of choice is quantitative easing, a.k.a. QE. If you print a trillion, Iâll print a trillion. Of course, he and she will too. No change in exchange rates after a trillion? Letâs do it again, QE2.
The stimulus has failed.
How should one interpret the result? If you were Paul Krugman, you would say it wasnât enough. Of course, if 20% of GDP in budget deficit and another round of QE still donât work, he would say not enough again. You can never prove Krugman wrong. Such a smart fellow.
The problem is that all the others wonât follow this program. China could not move up its currency value too much. Otherwise, it would trigger hot money outflows, a total collapse of its property market and the banking system with it.
Japan isnât in a position to appreciate the yen much. Its industries have lost competitiveness to Germanyâs and even the U.S.âs.
The euro is surging by default. The European Central Bank seems to still be talking like the Bundesbank. But its position canât last through the next sovereign-debt crisis.
The U.K. doesnât need persuasion to embrace QE. It is like a big Hong Kong, all about stir-frying stocks and properties.
It seems that nobody wants to appreciate. Most major economies will do something to keep their currencies down. That is checkmate for the U.S. Without devaluation benefits on rising exports, QE just leads to inflation, first through rising oil prices. The American people are suffering from declining housing prices and high unemployment. If the gasoline price doubles from here, the country may not be stable. How would the elite react? Probably more of the same.
The world seems on course to another crisis in 2012.
The same people who caused the last crisis are still in charge. Theyâll get us into another. Iceland is taking its ex-prime minister to court for causing the banking crisis. Worse fates await the people who are causing the next crisis. China used to chop off the heads of its failing ministers at the capitalâs vegetable market. Maybe we should bring back the practice and globalize it.
:eek:
Full article:http://www.marketwatch.com/story/quantitative-easing-the-numberless-oblivion-2010-10-25?pagenumber=2
