Global finance leaders are continuing to lash out at the decision by the U.S. Federal Reserves to implement a further $600 billion in quantitative easing, to push the economy further from recession.
After 18 months of anaemic growth, almost no progress on unemployment, and still slumping house prices hammering U.S. consumers, since the Fed’s initial attempt to inflate the world’s largest economy away from deflation, quantitative easing 2 was unveiled late last week.
The emerging economies which have born the inflationary and currency appreciating brunt of QE1 will largely bear the same again. The Fed’s announcement pushed Brazilian Finance Minister Guido Mantega to rail against the move in pointed terms.
“Everybody wants the US economy to recover, but it does no good at all to just throw dollars from a helicopter.”
What concerns me greatly about US fiscal policy (if one, in fact, can characterize what the Fed is doing as a "policy", and not an horrendous "Hail Mary" pass which absolutely will not benefit American consumers in the slightest) is the reality that trade/financial wars are often followed by real wars.
Historically, the US has generally gotten out of its depressions by going to war. Looking at the evolution of ever more lethal means to inflict injury or death the US has come up with since World War II, that's enough to bring a collective shudder to every thinking person on this planet.