A
global backlash has emerged against the Federal Reserve's blatant
policy of devaluing the dollar by printing $600 billion out
of thin air, a move that analysts, economists, foreign ministers
and even the Fed's own employees charge will only serve to stall
economic recovery and initiate trade and currency wars.
On the eve of the G20 summit in Seol, finance
ministers in China, Brazil, Russia and the euro zone
have denounced the Fed's quantitative easing, adding
to an already deafening chorus of critics.
German Finance Minister Wolfgang Schäuble
was one of the first to speak out against the Fed, describing
its policy as "hopeless" and "clueless"
and adding that
"They have already pumped endless amounts of money into
the economy with extremely high budget deficits... It doesn't
add up when the Americans accuse the Chinese of currency manipulation
and then, with the help of their central bank's printing presses,
artificially lower the value of the dollar."
China and Germany in particular are reliant on
exports. Given that a cheaper dollar will make American exports
cheaper, and theirs more expensive, it is hardly surprising
that the two countries have been vocal in their opposition to
Bernanke's QE2.
China's Vice Finance Minister Zhu Guangyao has
charged that the Fed's move doesn't "take into account
the effect of this excessive liquidity on emerging-market economies".
A
commentary piece in a leading State Run Chinese
newspaper goes one step further, as professor Shi Jianxun notes
that the Fed's intentional manipulation of the dollar's value
could cause countries to put up trade barriers.
"In essence this is printing money in an unrestricted
way, which equates to indirect exchange rate manipulation,"
Jianxun writes.
"If a trade war is set off, the global economy will face
not only a crisis, but very likely a collapse, because it will
unavoidably trigger a wave of global trade protectionism and
in the end everyone's interests will be harmed."
It highlights just how far into the twilight zone we have traveled
when a Communist Chinese mouthpiece begins to sound reasonable.
China's suggestion that the G20 should monitor and regulate
the Fed's decision making, however, represents a further step
toward world governance of domestic economic policy. The option
facing the American people would then be between a private banking
cartel running the US, as it currently does, or an unelected
world government.
It is this very fusion of power that the intentional decimation
of the global economy serves.
Printing excessive amounts of money, tampering with interest
rates and alienating emerging economies abroad is exactly what
caused the crisis in the first place, so why is exactly the
same thing being done again? Because a cartel of elites knows
that out of the chaos this engenders they can consolidate and
prosper.
While US Treasury secretary Timothy
Geithner has pointed to China's efforts to "shift
growth away from a model they believe is too export-dependent",
his warning that "unilateral action by individual countries
could destabilise the global economy and stifle growth"
is baffling in light of the Fed's actions.
Similarly, Obama's comment that the Fed's actions will be "good
for the world as a whole" is backward in this context.
Furthermore, the president's declaration that "We can’t
continue in a situation in which some countries are maintaining
massive surpluses and other countries are maintaining massive
deficits," is stupefying given that this is exactly what
the Fed is encouraging.
As Jean-Claude Juncker, chairman of the group of eurozone finance
ministers and Luxembourg Prime Minister, has noted that the
Fed is effectively "fighting debt with more debt".
"I don’t think it is a good decision," he
told a European parliament committee. There is great criticism
of the Chinese policy, but in a different way they (The Fed)
are pursuing exactly the same policy."
Barclays
Wealth analyst Michael Dicks notes that while the
Fed's actions may nominally grow GDP, any boost from marginally
lower long-term rates, higher share prices and a lower exchange
rate, will most likely be more than offset by international
resistance.
Another analyst, Ted Scott at F&C Investments makes the
point that without supply or demand for credit, the Fed cannot
push the money it has created into the economy anyway. Meanwhile,
it is creating dangerous asset bubbles and, he argues, is in
danger of debasing the currency and generating inflation.
Even the Fed's own employees have denounced its actions, with
Governor Kevin Warsh saying he is concerned the central bank’s
expansion of record stimulus may spark too much inflation, fail
to aid growth and delay any plans to reduce U.S. indebtedness.
“I am less optimistic than some that additional asset
purchases will have significant, durable benefits for the real
economy,” Warsh
said today in a speech in New York.
In his criticism Warsh joins Dallas Fed President Richard Fisher,
the Philadelphia Fed’s Charles Plosser, Minneapolis Fed
President Narayana Kocherlakota, Richmond Fed President Jeffrey
Lacker and Kansas City Fed's Thomas Hoenig, who have all expressed
dissent with the bank's recent decision making.
Brazilian president-elect Dilma Rousseff words on the Fed's
actions are perhaps most poignant:
"the last time there was a competitive devaluation of
currencies it ended up where it did, in the Second World War."
——————————————————————
Steve Watson is the London based writer
and editor at Alex Jones' Infowars.net,
and regular contributor to Prisonplanet.com. He has a Masters
Degree in International Relations from the School of Politics
at The University of Nottingham in England.
A
global backlash has emerged against the Federal Reserve's blatant
policy of devaluing the dollar by printing $600 billion out
of thin air, a move that analysts, economists, foreign ministers
and even the Fed's own employees charge will only serve to stall
economic recovery and initiate trade and currency wars.
