Fed's new stimulus plan worries global powers

来源：百度文库 编辑：神马文学网 时间：2024/04/30 19:14:20

Fed's new stimulus plan worries global powers

09:02, November 05, 2010      

Email | Print | Subscribe | Comments | Forum 

Increases the bookmark twitter facebook digg Google Windowslive Delicious buzz friendfeed Linkedin diigo reddit stumbleupon

The unrestrained issuance of US dollars could trigger another crisis, an adviser to China's central bank warned Thursday, shortly after the US Federal Reserve announced that it was pumping out more money to boost growth.

"As long as the world exercises no restraint in issuing global currencies such as the dollar - this is not easy - the occurrence of another crisis is inevitable, as quite a few far-sighted Westerners lament," Xia Bin, an adviser to China's central bank, said in a commentary on ftChinese.com that is managed by the central bank.

Developing countries must set up a firewall through currency and capital control to buffer itself from external shocks, Xia said.

The Federal Reserve said on Wednesday in a statement that it plans to buy an additional $600 billion of Treasuries by the end of the second quarter of 2011, at a pace of about $75 billion a month.

The move, known as a second round of quantitative easing (QE2), maintains interest rates near zero for an "extended period," and encourages banks to lend more.

The goal is "to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate," the Fed's policy committee said.

However, some economists say the new policy will have a limited positive effect on the US economy and instead stir up inflationary pressures domestically and create a flood of cheap capital flowing to emerging economies, which will cause other problems elsewhere.

"There are serious concerns that when the US floods the world with dollars that find their way into equities, into stocks in Asia, whether in Hong Kong, Thailand or Indonesia, the effect of that on the local economies can be quite difficult to cope with," said Uwe Parpart, chief Asia economist in Hong Kong for US securities dealer Cantor Fitzgerald, quoted by Voice of America.

"The large amount of cheaper dollars coming into the country not only ignites inflation, but you always have to think that whatever comes in quickly can also be pulled out quickly," Parpart said.

Bulgaria's finance minister, Simeon Djankov, said Thursday that the Fed's move is likely to backfire and compromise the resolve of European countries in their austeriry drives.

Some countries are already planning measures to curb capital inflows in the wake of Fed's announcement.

South Korea's finance ministry warned Thursday of taking aggressive action to curb capital inflow, and Brazil's foreign trade secretary said the US move could cause "retaliatory measures."

Australia and India also raised interest rates to stay on top of inflation.
Michael Pettis, a Beijing-based finance professor and commentator with the Carnegie Endowment for International Peace, told the Global Times that the Fed's move is a result of limited options for the US to revive its economy.

By Song Shengxia, Global Times
【1】 【2】

  • Official blasts U.S. 301 probe of Chinese clean energy policies

  • Senior official stresses boosting China's innovative power

  • China revises regulation to protect patients of work-related diseases

  • Chinese delegation visits Pakistan's flood-ravaged areas for reconstruction

  • Experts: hukou system is unfair to farmers

  • China tightens rules for housing fund loans

  • WB sees change in China's growth pattern

  • Official blasts U.S. 301 probe of Chinese clean energy policies

  • China's vice mayor probed after Internet protest over love affairs

  • China's longest subway to open in Beijing by year-end

Fed's new stimulus plan worries global powers Wall Street rallies on Fed stimulus plan How will the government stimulus plan affect you? Global nuclear abolitionists protest in New York China's stimulus package benefits China and world CCIE LAB COURSE PLAN (R&S) Medvedev outlines plan for Russia's modernization China's Cabinet approves education reform plan Ireland's austerity plan draws mixed reactions Obama economic plan aims for 2.5M new jobs by... Ministers complain Fed's quantitative easing EU-U.S. summit targets global challenges New technique revolutionize s surgery .............. CCTV New Year‘s Gala Obama's job plan 'will not affect China' Thai "red-shirts" movement accepts PM's reconciliation plan Thai "red-shirts" movement accepts PM's reconciliation plan 在 Obama's job plan 'will not affect China' Ireland's austerity plan draws mixed reactions kk Fed's latest bid to help economy, goes too far? Expert: Half of China's antibiotics fed to animals 听峰‘s Blog -> vim ctags taglist cscope cppcomplete global U.S. stocks continue slide amid global sell-off China, U.S. discuss bilateral ties, global economy