By Himfr Paul

Quantitative easing global risks and challenges of the era has just begun, quantitative easing credit not only upset the total amount of credit creation mechanism, the relationship between real economic growth mechanism, leading to confusion in the global financial order, U.S. dollars traps and dangerous, and will also make national macroeconomic policy more complex, policy coordination between countries is becoming increasingly difficult, further increasing the risk of economic imbalances.

The global economy is to re-balance? Or increasing imbalance? Currently, the global currency structure does not reflect the increasingly global economy, loss of the anchor currency of the world economy is facing economic growth, inflation, employment and the plight of the exchange rate away from the challenge of each other, the global real center of wealth creation and financial products to create centers departure from more and more serious.

For China, a major industrial countries, the impact of quantitative easing would be comprehensive, will be an increasingly volatile local currency pegged to the credit currency long-term economic and financial stability, which not only lose their own monetary policy independence, but also very susceptible to external pressures. Economic development of China’s industrial and financial imbalances brought about by a series of unavoidable problems, the world, “the ascent of the West down, north south hot cold,” the pattern of China will be doomed to face a longer period of asset inflation and the rapid appreciation of the risk of the renminbi, especially since the decision of exchange rate formation mechanism, in recent years the stock of foreign exchange accounts for the ratio of base money stock increasing, imported inflation and liquidity as the main source of liquidity, in what China’s financial policies and macro to profit and avoid loss of economic policy, national economic security and stability, protect the assets of RMB is indeed the most critical issues the policy test.

Judging from the perspective of the nature of the crisis, the crisis was not by the financial sector, local non-systematic risks triggered by the global economic crisis. Since 2007 the global crisis is the economic globalization process triggered by the global economic imbalances between the global distribution of benefits and a range of issues related to mandatory adjustments. Judgments on the basis of this study that the various risks in the global economy and global economic imbalances are associated, and quantitative easing may further contribute to global supply and demand, the real economy and the virtual economy, capital flows, the distribution of wealth, inflation and deflation, the international monetary system and so the risk of imbalance.

First, demand and supply structure of the world division of labor system is facing a huge imbalance of international payments problems. China as a major world economy, the supply side, is facing a shrinking market of insufficient external demand; and rely on consumer credit alleviate the economic contradictions of the developed countries led to excessive debt due to unsustainable consumption patterns, consumption increment incremental production is difficult to catch up increase in excess capacity on the one hand, while the other constraints in the global economy growing external demand, supply and demand gap will increase.

Second, the global virtual economy and real economy, growing out of touch, and now a manufacturing center has gradually shifted from the developed countries, emerging market countries, but the monetary and financial center is still developed, developing financial markets are underdeveloped, fragile financial system, in Foreign Exchange reserve currency denominated long-term dependence, settlement, lending and investment, currency mismatch caused by exchange rates and asset risk is unavoidable, the risk will increasingly be borne by the emerging market countries.

Third, increasing the risk of global capital flows disorder. The risks and benefits of international currency asymmetry mechanism, the continued expansion of global liquidity, growing excess liquidity abroad. International Monetary Fund (IMF) data show that the United States, Europe, Japan and other major reserve currency issuing countries in the broad money supply increased from 8 trillion in 2007 rose to 10 trillion in 2009. As emerging markets relative to developed economies, long-term growth advantage of investors to diversify investment overseas markets will strengthen as well as emerging market currencies, long-term nominal and real exchange rate appreciation is expected, etc. will lead to huge international capital flows, including the risk of speculative capital disorder , emerging economies are likely to push the edge of asset bubble.

Fourth, the debtor and creditor quantitative easing growing imbalance in wealth distribution. Quantitative easing monetary policy, the United States is the nature of debt monetization, the United States will “nationalization of private debt”, then “internationalization of national debt,” so that other countries pay for the crisis in the United States, the Fed plans to buy bonds with the day to support the amount of global liquidity strategy, which is backed by accelerating the transfer and redistribution of global wealth. Global foreign exchange reserves in 2009 is the world’s gross domestic product, 13%, 60% are dollar-denominated assets, which is over 50,000 billion U.S. dollars, of which China has reserves of 2.4 trillion U.S. dollars, accounting for the global foreign exchange reserves, refrain bit first in the world, other emerging economies, total and half of the United States will reserve currency devaluation in disguise by default its external debt repayment obligations to the wealth of these countries substantially impaired and diminished, and seriously damaged the interests of its creditors. The growing pressure of imported inflation in China affect the real economy and the manufacturing costs even greater, the same inflation tax levied in China.

Five is the world’s developed countries are now shown established and emerging economies, inflation and deflation to confront the emerging economies in order to quantify the quantitative easing tight against the developed countries, resulting in an imbalance of monetary policy. At the same time most of the emerging market currencies pegged to the dollar, monetary policy autonomy seriously weakened. Unbalanced monetary policy, not only the international purchasing power of most emerging economies, and domestic purchasing power away from facing “external appreciation, internal devaluation” of the dilemma, but also contributing to global trade imbalances, which in turn further increase in the global economy is not balance, there may be a new crisis lay hidden.

Sixth, to further exacerbate the imbalance of the international monetary system. The international monetary system consists of three pillars, namely, the decision of the exchange rate mechanism, the supply of international liquidity mechanism and adjustment mechanism for current account imbalances, the United States the right to decide control of the exchange rate and the supply of international liquidity, while the right to point the finger international trade imbalances, therefore, the United States to re-“means the adjustment of current account”, to borrow U.S. dollar hegemony will be “dollar standard system” evolved into “American standard” system, the dollar cycle, will further determine the global economic cycle. The global economy has been seriously derailed, the United States the name of the guise of rebalancing the global economy, strongly advocated the framework of balanced growth, but pulling the world economy further and further away on the wrong track.

About the Author: I am a professional editor from

China Suppliers

, and my work is to promote a free online trade platform. http://www.xpshou.com/ contain a great deal of information about

hp deskjet 710c

,

frigidaire chest freezer

,

shoe storage solutions

, welcome to visit!

Source:

isnare.com

Permanent Link:

isnare.com/?aid=654917&ca=Business