Before the U.S. account imbalances caused and exacerbated by the global financial crisis of 2008, we have a long-term trend in dollar depreciation. The United States failed to recover its economy from the financial crisis of 2008, moreover entered a recession with high unemployment and low economic level.
Now with the intention of increasing domestic consumption, the Fed has bought huge amounts of domestic debt securities considerably increasing the dumping of dollars into the economy.
The intention of the U.S. economic authorities is that the banks start to lend more money to people in order that they can go to consumption, but this measure is doubtful, since banks fear to lend money for fear of a similar default to the 2008 crisis, and banks are in need of money to cover its liabilities.
The measure will result in a huge transfer of money (U.S. dollars) for emerging markets, including Brazil, China and other countries in Asia and South America, this movement will cause the currencies of these countries are valued against the dollar, declining export capacity and increasing imports. Will also bring about imbalances in the trade balance and payments.
Movements everywhere have begun to occur, but believe it to be ineffective, the devaluation of the dollar will continue gradually over the years and will test the ability of these economies in dealing with a more volatile and unbalanced.
The imbalance is clear, labor more expensive, higher costs and therefore less expensive goods and export competitiveness. Will become an inevitable deindustrialization.
This whole scenario can be mitigated, but not without some adjustments and bitter medicines and unpopular.
Keywords: money, currency, finance money, money finance, business, money & business, money and economy, global economy, economy,
Now with the intention of increasing domestic consumption, the Fed has bought huge amounts of domestic debt securities considerably increasing the dumping of dollars into the economy.
The intention of the U.S. economic authorities is that the banks start to lend more money to people in order that they can go to consumption, but this measure is doubtful, since banks fear to lend money for fear of a similar default to the 2008 crisis, and banks are in need of money to cover its liabilities.
The measure will result in a huge transfer of money (U.S. dollars) for emerging markets, including Brazil, China and other countries in Asia and South America, this movement will cause the currencies of these countries are valued against the dollar, declining export capacity and increasing imports. Will also bring about imbalances in the trade balance and payments.
Movements everywhere have begun to occur, but believe it to be ineffective, the devaluation of the dollar will continue gradually over the years and will test the ability of these economies in dealing with a more volatile and unbalanced.
The imbalance is clear, labor more expensive, higher costs and therefore less expensive goods and export competitiveness. Will become an inevitable deindustrialization.
This whole scenario can be mitigated, but not without some adjustments and bitter medicines and unpopular.
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