United States receive criticism from all sides because the decision to print money

U.S. decision to pump 600 billion dollars into the economy has sparked a wave of strong disapproval. World leaders, who are preparing for the G20 summit in Seoul this week, warns that the move will complicate U.S. global economic recovery.

The extent to print U.S. dollars was felt in financial markets, where stock markets and gold rose. The first reaction has been to depress the dollar, reaching a minimum half past nine months against the euro, to $ 1.4282 per euro. Later Friday, U.S. currency also gained ground, it is appreciated by a quotation of $ 1.4032 per euro, after data published by U.S. authorities showed that in October and have created 151,000 new jobs in the economy American.

Also, the price of gold has been influenced, to reach a new record of $ 1398.7 per ounce (about 50 dollars or 35 euros per gram).

Officials of major countries such as China, Brazil and Germany have criticized the decision of U.S. central bank (Fed) to launch a program of acquisitions of government securities worth 600 billion dollars, while several East Asian central banks have announced that they are preparing measures to protect local economies by massive capital flows, Financial Times.

“I have great doubts about the usefulness infusion of unlimited quantities of money market,” said German Finance Minister Wolfgang Schäuble, noting that last week’s Fed decision undermines U.S. credibility and create uncertainty. “There is a lack of liquidity in the U.S. economy. I do not understand is the economic rationale for this move,” said Schaub.

Brazilian Finance Minister Guido Mantegna, the same one who first warned about the possibility of a “currency war”, said that “everybody wants the U.S. economy to recover, but will not throw money from helicopters do anyone any good. ” On the other side of the world, one of China’s central bank advisers, Xia Bin, warned that excessive printing of dollars is the main risk to the global economy and that his country sees the need to use foreign exchange policy and control of capital flows to protect against external shocks.

“As long as nobody puts no limit on printing coins with global significance, as the dollar – and indeed such a thing would be quite difficult – then the emergence of a new crisis is inevitable, as shown and Western series of wise, “said Bin.

Bernanke: It’s only monetary policy

President of the U.S. central bank, Ben Bernanke tried to reassure everyone, however, have voiced concern that the Fed’s new measures, saying that the program of purchases of government securities is only a conventional monetary policy, achieved through tools different, writes The Wall Street Journal.

“In my opinion, there is no discontinuity as far as some people would think” that Fed policy now seeks, Bernanke said. “There is a view from abroad (outside the U.S. – editor’s note.), That quantitative easing or acquisitions of assets are a strange thing and we really have no idea what will happen then, because it would be a policy whose result can not be anticipated. On the contrary. What we do is just monetary policy, “the Fed chief said.

G20 summit follows a not so quiet

Moving Americans could monopolize discussions and G20 Summit (20 group of leading industrialized nations in the world) this week, which will take place at Seoul, most likely creating two camps: the United States and other states participating. Most world leaders are opposites that so far the Fed is likely to emphasize the U.S. budget deficit, which the G20 leaders have pledged to avoid. At the last G20 summit, held in June in Toronto, major economies have pledged that they will halve deficits by 2013 and 2016 that will reduce the amount of public debt to GDP.

Lehman is history

Shares listed on U.S. stock exchanges recorded the fifth consecutive weekly rise, the Dow Jones reached the highest level of pre-bankruptcy of investment bank Lehman Brothers in 2008 11444.08 points, Bloomberg. Advance scholarship in particular, was boosted by the Fed announcement on the launch of a government procurement program worth 600 billion dollars. Also, Standard & Poor’s 500 index rose 3.6% last week, recording the last two years maximum, of 1255.85 points. “Everybody was talking about the program even before the Fed’s purchases, but after the announcement, the market seemed to behave as if everything would have been nine news,” says Wasif Latif, vice president of USAA Investment Fund.

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Posted by E.Hillwig on Nov 7 2010. Filed under Featured News, Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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