Norman Macrae Youth Foundation NMYF -net of The Economist's pro-youth economist
Like all wars the biggest losers are ordinary people, and the upcoming generation
|. ..||.Competitive devaluation and financial warfare.. QE2 is a second iteration of the current financial war being waged by the USA against the rest of the world. On 3 November 2010 there was a further devaluation of the US dollar by the Federal Reserve which is the central bank of the US. This devaluation by which the US printed US$600 billion of its currency is another manifestation of the present currency war. The term, ‘currency war’ is another way of referring to the competitive devaluation of the top capitalist currencies. The reason for the devaluation is to make a country’s exports cheaper in order to rebuild the economy.
In the US, there is an assumption that US manufacturing would recover if the dollar were devalued. The top leaders of the US know this to be fiction because they understand that the productive capability and the competitiveness of the economy have been hollowed out by the emphasis on finance and financial services industries. One commentator said clearly that the US$600 billion would not assist the US economy: ‘That meant that the money Washington is pouring into the economy will go to those who need it least – banks, business, and families with strong balance sheet are in the best position to take advantage of the cheap money flooded into America. The unemployed – who figured prominently in the Fed statement and were one of the direct targets of last year’s financial stimulus – for much further down the food chain, as will the Americans grappling with foreclosure.’