Sunday, February 20, 2011
Bernanke Defends US Policy
Federal Reserve Chairman Ben Bernanke needed to rebuttal his critics for saying that US policies are leading to inflation, deflating the dollar's value across currencies. Other surging economies are able to adjust their market by adjusting the exchange rate, interest rate and other means to help with the economy struggles in our own market. It is important when a super economy like the United States goes into a recession that other economies of that stature help to balance out the shift in money and values across the board. The French are worried about getting overloaded with indicators that are informing us about the economic situation that is present and where it is headed. Should we fix some of the policies in place now? What else can we do to help the global market rebound from the worldwide recession that has occurred? Here is the link.
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Last quarter in Multinational Finance, I found myself writing numerous memos about the Chinese yuan. Many articles I read said that the yuan was extremely undervalued, allowing Chinese exporters to unfairly capitalize on this.
ReplyDeleteIn an attempt to level the playing field, the U.S. began pouring dollars into the economy in order to depreciate the U.S. dollar against the yuan and helping U.S. companies increase their exports. Everything I wrote about was pretty much summed up in the statement below:
Mr. Bernanke didn't refer to China by name, but his reference to exchange rates seemed directed at Beijing, which is reluctant to let its currency, the yuan, rise as rapidly as several other G-20 countries would like.
It's interesting to now think about this in the context of public sector economics as opposed to multinational finance.
So in other words, contractionary monetary policy needs to be stronger in order to combat rising prices? The article was a bit confusing to me.
ReplyDeleteThe best thing we can do to help the international economy is to help ours.
ReplyDeleteAgain, I think time is essential is seeing drastic improvements. If we continually change policy we will never see change. I thing current policy sheds some light for the future, so we should give it some time. Richard, very simply but well put... we need to help ourselves if we're going to help the global economy.
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