Ben Bernanke US Federal Reserve Chairman
Okay so our beloved fed reserve chairman has come up with a brilliant way of killing the rest of the world economies, at least until they catch up. So what happens when you are the largest consumer in the world and you try your hardest to kill the value of your currency? Well you manage to make the life of countries that live off you harder. I call this protectionism, devaluing your currency in the face of a world recession is a real low blow to those countries that depend on you for your consumption. Now the other side of the coin is that large USA companies will benefit in the short term (a little protectionism), but what happens when those foreign economies you’ve damaged find their recession deepening because of currency exchange. Well large US companies, who receive a significant source of their revenue from overseas, will start to suffer on softening foreign sales.
The actions the Federal Reserve took yesterday are intentioned to expand credit in the United States, but isn’t that what started the problem in the first place. To me it seems like our Government can’t give up the past to move onto the future where we you don’t need a new car every 2 years and 5 LCD televisions per household. We need to focus on letting the market go through the difficult process of price discovery and start saving real money instead of looking at credit as a safety net (i.e. credit cards). The US government should stop trying to fix it and maintain the laws instead of inventing new ones.
Just my opinion.
Tags: ben bernanke, credit, economy, money, recession, US, USA
