US criticizes Germany

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
I think it is rather amusing that the US, which struggles with more than they can handle, is out there criticizing other countries. I am not saying that Germany does a great job either, but for the US to criticize any country for just about anything is more like the pot calling the kettle black.

I think before you point fingers at others and accuse the of harming the global economy you should do a better job yourself. The US with is policy is harming the global economy long-term more than any other country in the Western World, at least in my opinion.

No matter what your view is, I think the US is in no position to point fingers. They should look at Congress if they want to blame anyone for a failed economy.
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
In my opinion they harm the global economy with their monetary policy which I believe is harming their own economy long-term. Since the US is the second biggest economy in the world and for now unfortunately do still enjoy reserve currency status their USD policy has a negative impact on plenty of economies.
 

Enivid

Administrator
Staff member
Nov 30, 2008
18,534
1,355
144
Odesa
www.earnforex.com
How is it negatively impacting other economies if the US does what it is supposed to do - prints money for the global economy? If they stopped QE and raised the rates, that would be harmful as it would cut the liquidity, stagnating the international trade and lending (thus businesses).
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
And that's one good reason among others why the other countries need to change their reserve currency from USD. The perfect example of what could happen was the recent fed decision to taper out purchases in global markets. Of course, the actual decision turned out to be something else but by then, most asian currencies were hit.

This is why most of the major currencies are busy getting the ducks in a row to ensure something similar does not happen when the decision time rolls around next Jan-march. Some of them have already put currency swap exchanges in place and if Fed goes ahead, then you would probably see the reserve currency being changed from USD to say, JPY or Euro.
 

Enivid

Administrator
Staff member
Nov 30, 2008
18,534
1,355
144
Odesa
www.earnforex.com
Some of them have already put currency swap exchanges in place and if Fed goes ahead, then you would probably see the reserve currency being changed from USD to say, JPY or Euro.

One of the problems is that the authorities of the respective need to want to turn their currencies into reserve ones.

I really recommend reading the book "The Foreign Exchange Matrix" by Barbara Rockefeller and Vicki Schmelzer. It gives a lot of detail into how reserve currency works - its advantages and disadvantages, and why it is so difficult to change from one currency to another.
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
How is it negatively impacting other economies if the US does what it is supposed to do - prints money for the global economy? If they stopped QE and raised the rates, that would be harmful as it would cut the liquidity, stagnating the international trade and lending (thus businesses).

Well, we can disagree that QE is beneficial. The majority thinks that, the minority disagrees and eventually you will see down the road how QE ensured more problems.

The issues is that most think you can solve a problem without pain. Economic performance decreased since QE3 and the long-term issues and negative impacts of QE outstrip any short-term positive impact.

The truth is we will never know how bad the situation would have gotten without any stimulus, but we do have the only example of stimulus with Japan who are in their second decade of stimulus. The US will face the same and at some point collapse under the debt burden.
 

Enivid

Administrator
Staff member
Nov 30, 2008
18,534
1,355
144
Odesa
www.earnforex.com
Economic performance decreased since QE3 and the long-term issues and negative impacts of QE outstrip any short-term positive impact.

GDP growth is positive since the beginning of QE3:
Q3 2012 +0.1%
Q1 2013 +1.1%
Q2 2013 +2.5%

The US will face the same and at some point collapse under the debt burden.

Why? Their current debt is taken at ridiculously low interest rate. Moreover, the debt is issued in the currency that they can legally print in any amounts. They cannot deflate unless they politically decide to.
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
On the Reserve currency, here's an update of sorts. The foreign ministers of India, Russia and China are soon to meet for an inter-ministerial meeting in Delhi. One of the items on the agenda happens to be the setting up of a fund, more along the lines of IMF to tackle USD related issues and help member countries deal with currency devaluation.
While, I do think that the USD would continue as a reserve currency for the short term, to expect it will be so, in the future would be idealistic - given the debt problem.
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
GDP growth is positive since the beginning of QE3:
Q3 2012 +0.1%
Q1 2013 +1.1%
Q2 2013 +2.5%



Why? Their current debt is taken at ridiculously low interest rate. Moreover, the debt is issued in the currency that they can legally print in any amounts. They cannot deflate unless they politically decide to.

I never said GDP was negative, I said it was declining. I see you belong to the group who thinks the US is never going to come crashing down or that QE will be long-term positive.

Two things:

1. We will never know what would have happened without QE, all we can do is speculate which is meaningless.

2. The full fallout of QE will not be visible to the general public until decades from now so at this point we can agree to disagree and the future will give the precise answer as to which camp was right about it.
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
On the Reserve currency, here's an update of sorts. The foreign ministers of India, Russia and China are soon to meet for an inter-ministerial meeting in Delhi. One of the items on the agenda happens to be the setting up of a fund, more along the lines of IMF to tackle USD related issues and help member countries deal with currency devaluation.
While, I do think that the USD would continue as a reserve currency for the short term, to expect it will be so, in the future would be idealistic - given the debt problem.

Additionally during the very first BRIC meeting (before South Africa was part of it) the four countries agreed to phase out support for the US and start buying each others debt. This all takes time and can't be done in a few short years, but the US is out of the door.

Their reserve currency status is soon to be gone, commodities will not be priced in USD's anymore as most countries are sick and tired of importing inflation due to moronic US fiscal policy. I think in about 10-15 years we will look at a much better world as the US is being dropped like a hot potato and rightfully so in my opinion.
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
I agree and if the debt issue is not resolved soon, expect it to happen a lot sooner..
As for the new reserve currency, it could be anything from Euro to Yen or a new zonal currency which should resolve a lot of problems for the BRICS, from current account deficit to tackling inflation
 

karunia

Banned
Sep 6, 2013
25
1
0
indonesia
I agree and if the debt issue is not resolved soon, expect it to happen a lot sooner..
As for the new reserve currency, it could be anything from Euro to Yen or a new zonal currency which should resolve a lot of problems for the BRICS, from current account deficit to tackling inflation

I think that the US will not resolve the debt issue soon, it's on US strategy and its belong their economic political..
I do not know why do they do this.., But i think they have bad policy about this issue..
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
All countries have the same issue though they are better at tackling it. It all comes down to the policy in question and unfortunately, for the US, it is a question of waking up to the problem after all the horses have bolted and the recession didn't help either.
But on the flip side, the USD situation is becoming the perfect case study for all other economies on what not to do..
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
24
32
Canada
All countries have the same issue though they are better at tackling it. It all comes down to the policy in question and unfortunately, for the US, it is a question of waking up to the problem after all the horses have bolted and the recession didn't help either.
But on the flip side, the USD situation is becoming the perfect case study for all other economies on what not to do..

I totally agree with you. Actually Japan was the first example of how not to handle the situation and the US copied it and thought they were better at failure than Japan.
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
Thanks for the link and if abe-economics has its way, expect some changes to happen, starting with Japan - India, Japan - Russia..
Increasing the debt is not a bad thing but if mis managed, it can come back to bite you in the "you know what"..
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
No, they are not trying for a common currency and definitely not like euro. What they are trying to do is to set up a free trade zone for all of asia, exchange swap agreements and with BRICS, set up development bank and shore up against any currency risks.
In short, like BRICS, the asian nations are taking a page out of euro and upgrading it to a more reliable model.