Soft-dollar decision of the U.S. economy in the future

U.S. government adhere to the verbal strong dollar, weaker dollar actually allow the key point is: soft dollar policy in the United States a new component of macroeconomic policy, the policy at this time to launch all-round rejuvenation of the U.S. economy is a heaven-sent opportunity Depreciation of the U.S. dollar last resort The current weak dollar policy of the United States in order to stimulate the sluggish economy, a new package of macro-economic policies as an integral part. The new macro-economic policies of the United States by the following main elements: the first is to lower interest rates: the Fed from early 2001 to start lowering interest rates 12 times already; is the second tax cut: The U.S. Congress has recently adopted by President Bush 350,000,000,000 U.S. dollars of tax cuts , Although the size of the tax cuts have greatly reduced, but after all of the economic downturn will have some stimulus; depreciation of the dollar is the third policy: the United States in an attempt to stimulate exports and thus stimulate economic growth, which in international economic policy coordination and Stirred up great controversy in the international financial markets; is the fourth oil reserves policy: the war in Iraq, the United States efforts to expand oil reserves and increase economic growth momentum of the energy infrastructure. If, according to the chronological order, the soft-dollar policy in the United States issued a final macro-economic control policy, and in fact the U.S. economic recovery is finally able to order the hanging. From the effects of policy, tax cuts and a longer delay, the effect is difficult to grasp; has cut interest rates 12 consecutive times, the effect is not obvious, therefore, also blamed the Federal Reserve; more effect is the policy of the oil reserves policy, the United States Taking advantage of the war in Iraq to increase national oil reserves, but also a great deal of control over oil resources, U.S. economic growth momentum with the energy of a solid foundation. As a result, the U.S. economy is the most important thing is how to improve the macro-economic policies and other aspects of the policy portfolio to match in order to achieve the economy has clearly recovered soft dollar policy has become the new U.S. macroeconomic policy mix of the most important component of the . At present, with some signs of recovery in the U.S. economy, the United States tried to promote investment through tax cuts and lower interest rates to promote the production, export promotion weaker dollar will increase employment and stimulate further economic recovery in Mexicali. The implementation of soft-dollar policy will help curb the trend of deflation, which is the current U.S. economy can bear. At present, the U.S. stock market continued to rise significantly, even the three major stock indexes hit new highs in the past two years, the exchange rate will be reduced in favor of bank lending, and enhance consumer confidence. Therefore, the U.S. government to implement policies dollar right time. U.S. dollar assets was also dispersed to The reality that the United States needs to absorb a large number of foreign capital to make up for the huge trade deficit, it is therefore concerned that the implementation of soft-dollar policy would affect the flow of funds to save the world, the United States, the United States in the investment will flee the United States. According to statistics, in 2002 the U.S. current account deficit of its gross domestic product accounted for 5% of the total number 503,400,000,000 U.S. dollars is expected in 2003 the U.S. current account deficit accounts for at least the proportion of GDP will reach more than 4%. At the same time, the United States on tax cuts, borrowing to foster economic growth, making the federal government's budget deficit continued to rise, in 2003 the federal government's budget deficit could be as high as more than 400,000,000,000 U.S. dollars. On the other hand, in the 1990s in the U.S. economy for 10 years of high growth, the wealth effect arising from the dollar also overflow the world, not only dollar-denominated assets to further expand the coverage, but also the world's dependence on dollar-denominated assets increased. At present, the world's reserves of foreign exchange reserves in dollar assets, an unprecedented rise in Asia alone reached 1.2 trillion dollars of foreign exchange reserves, the world's foreign exchange reserves accounted for nearly 80% of the total, most of them for dollar-denominated assets. The world's dollar-denominated assets have had a cumulative effect of the new: on the one hand, increase the international financial system to the degree of dependence on dollar-denominated assets; on the other hand, an increase of international economic dependence on the dollar. People worried about the dollar led to the loss of wealth at the same time, not too much to flee U.S. assets, and not allow the dollar declined too, have to invest in U.S. assets, they have had a return of U.S. dollar assets of the new trend in the external environment in order to give the United States To support the economic recovery. In the past the United States must be based on a strong dollar to attract foreign capital to invest in dollar-denominated assets, but now it must be the natural flow of external funds in U.S. dollar assets in order to maintain the exchange rate is relatively balanced. The U.S. Treasury Department data show that as of June 11, foreign central banks from the Federal Reserve Bank of hosting the Treasury up to 746,600,000,000 U.S. dollars, representing an increase of 1 year in the past 126,000,000,000 U.S. dollars. There are indications that the weaker dollar in the case of a large number of Asian countries in recent months to buy U.S. Treasuries in order to reduce the pressure on their currencies. Compared with Europe and Japan, the United States remains the world's long-term investment reserves the Holy Land, and the market in Europe and the United States between the outflow of capital inflows, mostly short-term funds. The Japanese government is the direct holdings of U.S. assets, the European Central Bank is an indirect encouragement for the euro to reduce the relative assets, such as increased purchases of U.S. dollars of assets. As a result, the international environmental conditions of the new changes in a short period of time in the United States have the courage to implement soft-dollar policy, the flexibility of the exchange rate policy has been reflected in the new. Coordinate the operation of the market exchange rate In the United States a new package of macro-economic policy mix, with the exception of internal matching, international macroeconomic policy coordination is also a new trend. Not long ago in Evian, France for G-8 summit should discuss exchange rate issues, but did not reach the United States and Europe and the U.S. dollar exchange rate on the three major economies, currency exchange rate coordination. The weaker dollar, people have different views, debate, to build from here. Under the floating exchange rate system of exchange rate policy coordination, in a very different system of fixed exchange rate policy coordination can only be achieved through the operation of the market is conducive to national or economic entities reasonable price, no one can provide a model. Depreciation of the U.S. dollar is about at home and abroad "kill two birds with one": to meet the domestic need for policies to stimulate the economy and easing international pressure on exchange rate policy coordination. From the dollar's exchange rate policy co-ordination of the international demand to see the dollar pushed the euro down naturally, which is why in order to keep inflation under control as a fundamental concept of the European Central Bank not to cut interest rates for a long time, but early in June eventually forced to cut interest rates by 50 basis points. This game also shows that the situation between the United States and Europe of the basic contradictions in the economy is the contradiction between the monetary and financial. Japan on the other hand, the relatively weaker dollar also pushed up the yen, but the United States and Japan is not a major contradiction between the monetary and financial conflicts, but the export trade of conflict, pushing up the yen will help ease between the United States and Japan A visible trade deficit to force Japan to continue to carry out structural adjustment. From the international point of view of policy coordination, as the basis of different countries, to deal with fluctuations in the exchange rate policy is also psychological, Japan has to deal with exchange rate fluctuations in the experience of fear is not actually weaker dollar, Europe is more a lack of experience. For a long time, often used in some of the world's leading monetary policy or pattern of the policy carried out under the operation of the market, or if the trend of policy happened all of a sudden reversal of the larger, giving rise to confusion on the market. From the weaker dollar after the current round of the responses shows that the policy game continued. U.S. government will be a new round of policies to the apparent recovery, they would come to naught