By Lanbo Jiang
Submitted 2012-02-16 19:59:26
Number Of Times Read: 38
Weak U.S. dollar is certainly a long term, but such is relatively weak, and its decline in the exchange rate may not be so, but the decline in purchasing power is in the affirmative.
First of all, the huge U.S. debt already exceeded a hundred thousand billion U.S. dollars, now the U.S. government is still hard to borrow money. Statistics show that 10 years ago, the U.S. national debt was 5.7 trillion U.S. dollars in 2005 to 7.7 trillion. 6 months ago, that number reached 12 trillion. Some analysts said there are about 300 million 900 million people in the United States, 13 trillion national debt per capita debt on behalf of over $ 42,000. Even more amazing is that debt is a trillion dollars a year to increase the rate of growth. Only the United States the number of GDP a year? 14 trillion it. Internationally accepted safety line of debt GDP ratio is 60 , 100 of the United States to go and ran. This is just the public debt, it is estimated that with health insurance, pension insurance and other hidden debt, the United States is now caught in a 73 trillion dollar debt giant pit. 73 trillion U.S. dollars is what the concept? GDP a year over the world, in the 50 trillion or so. In other words, the United States 300 million people, the world spent a half bankruptcy. So if the dollar strong, the United States is to the world when Huolei Feng, to make their debt burden countries China to benefit these new claims, which is not logical and can not appear.
We would also like to see Europe, Japan s debt burden is enormous. Although the weak U.S. dollar, but the other major developed economies can not be strong, so they swap with each other is a relative strength of the relationship. U.S. dollar is certainly weak, but weakness is relative. Many international institutions have to make judgments, the United States are likely to loose N times, has predicted that the size of the next round is likely to reach 4,000 billion U.S. dollars. However, we note that the United States, Europe behind loose follow up. Depreciation of the dollar is bound to exacerbate the debt burden of the European Union, soon there will be Europe s debt crisis, Europe has to loose. After the implementation of quantitative easing in the United States, the European Central Bank announced on December 2 of its special support measures for the banking sector once again extended for 3 months because of the euro zone economic recovery process in the uncertainty faced by some up , European and increased efforts to purchase government bonds, increasing the size of printing. This comprehensive printing is the beginning of global inflation, the dollar s weakness is relative to its purchasing power and commodity prices would come in July 2010 to October international markets of energy, agricultural products, raw materials, metals and minerals such as price chain has been accumulated rose 7.6 , 17.6 , 11.4 and 21.1 , and these days the international price of gold, copper prices have created a new high. Behind the commodity boom of the overall weakness of Western currency.
But does not rule out short term U.S. dollar strength, and every time the result of a strong U.S. Treasury bonds must be issued again. Because the U.S. government s cash flow is maintained to rely on new debt, U.S. Treasury bonds also issued new debt to repay old debts also, if the weak U.S. dollar, then there is no straight line to purchase U.S. Treasury bonds, but the reality is that the dollar and euro, yen Alternating weak, then they can turn the issuance of bonds and alternate printing. Such fluctuations are also a lot of inside information to grasp these Western countries, their central banks in the international money markets can take advantage of asymmetric information between such big Yuli, the Fed is now a huge increase in financial derivatives assets to reflect the In that case, not only the weak U.S. dollar, but the Fed is Zuozhuang. This is a rule makers and judges are also involved in the game, this game is essentially a gamble, so that emerging countries such gambling is among the natural weak, the dollar s strength lies in its strong dealer.
U.S. response to future trends, the need is to diversify their reserves, foreign exchange reserves into a reserve from the assets, while increasing the price of its superior resources, the wealth of any game, took a strong currency or assets in the last word is not broken bumpy , so do not look at the dollar stable, safe to think the U.S. dollar, U.S. dollar weakness is certainly a long and relatively weak.
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Submitted 2012-02-16 19:59:26
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