Japanese Prime Minister and the Bank of Japan consensus, the recent series of throws a loosening of monetary supply and start a new fiscal stimulus policies. Experienced the baptism 20 years ago after the bubble burst several years, Japanese money supply too liberal on economic growth have been evaluated deeply understands the invalid, and, on the loose money supply because in the monetary transmission in the presence “of monopoly distribution”, and may exacerbate the problem of economic structural problems, Japan’s policy-making elites are well aware. This also explains the recent years, the Japanese currency to some extent with school alienation, carefully selected to ease monetary policy to stimulate the economy in part.

However, the recent monetary policy easing, the dollar clearly belongs yes Zaodao to race Zhong led the Huobi devaluation of the passive option for say about stimulating our economy, but with the integration of financial expansion Hexinzaiyu together to resist the strong appreciation of the yen against the dollar .

In fact, when the Federal Reserve recently issued a notice meeting, decided to maintain the loose monetary policy, continue to buy U.S. government bonds maturing, the world’s economists have forecast that economic growth prospects in the doldrums, trade balance deficit and the fiscal balance serious serious deficit of the United States, will be driving the new global major currencies competition. There are views that, as a falling dollar to other major international currencies pressure, such as the yen and the euro, the Bank of Japan and the European Central Bank will have in the near period of time, was forced to ease money supply to ease the short-term economic cycle Japan’s economy or the European economy is still unable to digest the appreciation of their currencies against the U.S. dollar.

Although no one now dares to do long-term forecast, but the pull of the depreciation of the dollar competition, short-term signs have been obvious. Earlier this year, the European sovereign debt issues, global funds did not know where to go when the value of the dollar as safe haven assets went up. But the European situation became clear, the dollar immediately regain decline. Compared with other long-term projections, it is interesting, the global economy’s long-term academic weakness against the U.S. dollar is a certain tacit understanding, because it is accumulated over the years by the United States trade deficit, fiscal deficits, the government and private sector debt accumulation decision.

Surplus and reserves from countries such as China’s investment in the United States balance of payments deficit and fiscal deficit, maintaining a constant for many years. However, once the various imbalances over the critical point, will lead to capital flows and currency credit crisis fracture.

Dilution, including public sector and private sector best way of all the debt is devalued and the note-issuing. If the U.S. insists on leading the world’s major developed countries, the depreciation of currency competition, is understandable. Creditors of the United States is concerned, that is, those countries with large dollar reserves, reserves in U.S. dollars, the investment choice of U.S. dollar itself, means to take risks. But it is worth pondering, why the state is not a large reserve of pressure in the dollar bet on the U.S. debt. Now it seems that major developed countries, is likely to have had to follow the U.S., for depreciation of the competition. As long as the balance of payments continued to accumulate a huge surplus, the formation of huge foreign exchange reserves management for specific purposes, such as the central bank can say no choice, irrespective of any major international currency, the result probably will be cleaning an air of wealth .

China, for instance, two recent market speculation that the U.S. housing sector or liquidation, then the room bond investments may be the two ashes. Whether it is cast, or SAFE with the central bank, can be said that the current foreign exchange management and exchange rate system is the “passive forced to invest in disease” unfortunate patients. To submit to the linked exchange rate, the central bank was forced to continue buying U.S. dollars, SAFE and the large cast were forced to invest in American bonds, despite the current gradually spread to other euro bonds and the yen debt.

The U.S. dollar led the world’s major currency devaluation contest kicked off the occasion, large foreign exchange reserves, or suffer significant loss. As the central bank balance sheet on the dollar reserves can not be directly assigned to the program to the national social security or personal account, as soon as possible to comply with market principles from the start to address the RMB exchange rate system and exchange system and the promotion of real and profound contradictions between the national welfare , it’s not too late.

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