The United States Releases More Than 100 Billion Banknotes &Nbsp Per Month; The Global Economy Is Facing Time Bombs.

More than 19 officials from the Federal Reserve said the Federal Reserve is about to adopt a monetary easing policy.

One official said quantitative easing would amount to $100 billion a month.

The so-called quantitative easing policy is the Fed's use of the US dollar to buy all kinds of bonds and non-performing assets, in essence, it is the replacement of banknote printing machine.

This will surely cause further depreciation of the US dollar.

Loose scale

Up to $100 billion a month.

Reuters reported 19 days ago that although the Fed's internal disagreement over irregular monetary policy is obvious, the mainstream view seems to agree that the US economy still needs further stimulus policy support, which is likely to be achieved by increasing the purchase of treasury bonds.

Denis, governor of the Atlanta branch of the Federal Reserve, said in an interview: "if we are to launch the next round of quantitative easing policy, the amount must be large enough to play a role."

He said: "according to our previous practice of putting us $100 billion per month, I think this figure is certainly under consideration.

But if the total amount of the whole project is only 100 billion dollars, it will be too small. "

Prior to this, Federal Reserve Chairman Bernanke has said in October 15th that because the unemployment situation is still grim and inflation is too low risk, the Fed is ready to take further monetary easing policy when necessary, to promote economic recovery and create employment, and to bring inflation back to an appropriate level.

During the financial crisis, the Federal Reserve maintained close to zero ultra-low interest rates and bought about $1 trillion and 700 billion of mortgage related bonds and treasury bonds to reduce market borrowing costs.

Still variable

Related measures next month

The need for more stimulus in the US economy seems to be the central idea of the Fed, but it has not yet received the unanimous support of all Fed officials.

Fisher, governor of the Dallas branch of the Federal Reserve, said that although the pace of economic growth is not enough to increase employment, the conditions for further monetary easing are not yet ripe.

Evans, governor of Chicago branch, not only supports further monetary easing policy, but also repeatedly calls for the realization of the Fed's price target.

Achieving the goal of price level requires the fed to endure a period of high inflation, thereby counteracting the inflation rate below the default normal level of the Fed.

Elizabeth Duke, director of the Federal Reserve Board, said that further monetary easing was not a certainty for the Fed's November meeting. "There are still many variables in the current meeting with the conference."

Analysts expect the Federal Reserve's related measures to come out at the next meeting on interest rate decisions in early November.

WTO warning

Currency wars will lead to trade wars.

The Federal Reserve's further easing of monetary policy is expected to push the dollar down to a 10 month low.

Emerging economies are fighting against the influx of hot money into the domestic capital market.

The people's Bank of China announced 19 days after raising interest rates, the appreciation of the RMB against the US dollar slowed down.

Pascal Rami, director general of the world trade organization, said 19 days that some countries' disputes over exchange rate policy may jeopardize Global trade.

Lamy said on the same day that recent disputes over exchange rate policy may still endanger Global trade.

Although the exchange rate issue is only a potential threat at present, this threat can be very dangerous for trade.

If countries adopt a non cooperative attitude towards exchange rate issues, the hard won economic stabilization and recovery process may face serious challenges.

The day before, IMF President Dominique Strauss-Kahn warned in Shanghai, China that if the world's major economies do not cooperate and continue to be entangled in exchange rate disputes, the global economic recovery will be at risk.

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G20 summit "currency war" key war

The US dollar index seems to have not stopped falling recently. More and more countries are dragged into this exchange rate dispute. The United States seems to be introducing the smoke of the currency war to the next battleground - the G20 summit in Seoul in November 11th.

In October 15th, the United States postponed its difficulties in RMB exchange rate.

The US Treasury said it would postpone the publication of the international economic and exchange rate policy report to the November 2nd congressional mid-term elections and the November 11th G20 summit in Seoul.

The US Treasury said it was postponing the release of the report in order to take advantage of the G20 summit to make more progress on this issue.

Geithner also said he would be in G20 finance ministers' meeting.

He continued to appeal to other countries to put pressure on China on the issue of RMB.

This move directly led the current focus of currency disputes to the G20 summit in Seoul next month.

However, a dispute is likely to be launched ahead of the meeting of G20 finance ministers and central bank governors held on the 22 day of this month.

Some analysts believe that officials attending the meeting are expected to discuss the recent exchange rate dispute.

The exchange rate dispute has become the top issue at the IMF and World Bank annual meetings in October 8th.

Many international voices are worried that if we do not find a new way to explore the issue of exchange rate, the world will face the risk of currency war or protectionism.

According to Nanfang Daily

Media voice

The financial times pointed out that the US banknote printing strategy will increase the pressure of Asian hot money, which has further worsened the dilemma faced by the fast-growing economies in the Asia Pacific region. On the one hand, these economies are facing pressure to allow their currencies to appreciate, while at the same time worry that the surge in capital inflows will undermine the stability of their economies.

The Wall Street journal believes that strong growth in the domestic economy, coupled with the exceptionally loose monetary policy of western countries, has pushed huge capital flows into emerging markets, but risks lie behind this prosperity.

Central banks in emerging economies can avoid more hot money inflows by postponing interest rates, but this may lead to asset bubbles and inflation.

In addition, if the risk aversion of the emerging market is heating up, a large amount of capital will escape.

The Nobel laureates say there is no winner in currency wars.

There are signs that the new round of quantitative easing policy, represented by the Federal Reserve, is bringing new risks to the emerging markets.

Agencies such as the world bank and the International Monetary Fund (IMF) have repeatedly warned that the big opening of capital gates in the US and Britain may bring significant risks to the emerging economies such as the influx of hot money and asset bubbles. To a certain extent, this has also laid the biggest "time bomb" for the current world economy.

Stiglitz, the winner of Nobel prize in economics, said on 19 th that under the current international economic situation, all countries should strengthen cooperation and jointly cope with the crisis, and there will be no real winners in the "currency war".

Stiglitz pointed out that the United States should pay attention to the development of its own economy. Only when the US economic growth accelerates and the world economy gets warmer, some countries will have more room to improve their currency elasticity. Otherwise, they will not be able to protect their industrial development and the interests of the masses.

In his new book "free fall: the United States, the free market and the declining world economy", Stiglitz warned that when the economic situation is bad, some countries often only consider their own interests, but at present, it is particularly important for the whole world to formulate a recovery strategy through coordinated steps.

When asked about his view of the possibility of a new round of quantitative easing monetary policy by the Federal Reserve Committee, Stiglitz criticized the Fed's monetary policy to a certain extent, which led to the chaos of the current exchange rate dispute, which brought instability factors to the international financial market and could cause new asset bubbles.