16 November 2010

The QE2: Bernanke Prints Again

By Sean Fenley  --  15 November, 2010  --  Countercurrents.org

The Federal Reserve’s QE2 is being met with near universally condemnatory reviews. The Fed’s effort to buy up $600 billion in government bonds is being seen as a shot in the dark for the foundering Obama administration. With the “austerity-minded”, Tea Party influenced Republicans measuring the drapes and curtains, for new and improved cushy offices in the United States Capitol; Obama appears to be running an end-around the anticipated policy gridlock that these “preeminently qualified”, so-called stewards of the national public trust are widely anticipated to bring about.

This end-around; however, appears that it will reap little more than a bubble at best, and a currency war — and perhaps even a trade war — according to some of the least optimistic economic policy analysts and observers. Additionally, this may portend the finish for the dollar as the global reserve currency, and the twilight of the U.S. as a major military power on the international stage. Moreover, it will also certainly bring about; potentially destabilizing, currency flows that will stream into third world and other developing economies. Michael Hudson of the University of Missouri, has likened this to financial warfare, with the aim of taking over a country’s assets, land and raw materials.

It’s worth noting that, the U.S. has been suggesting, for some time now, that the Chinese take their medicine and allow the Yuan to appreciate; but many — including Alan Greenspan — are interpreting this second round of quantitative easing, as a form of manipulating the dollar. And although this sort of hypocrisy may be lost on Obama, Bernanke, Geithner, etc., it will not be lost on the ordinarily capable Chinese. Nor was it lost on the German Finance Minister, Wolfgang Schauble, who reacted to this second round of quantitative easing in stating that, “It’s inconsistent for the Americans to accuse the Chinese of manipulating exchange rates and then to artificially depress the dollar exchange rate by printing money.”

Schauble, apparently is not impressed at all with the Fed/Bernanke policy, and has even suggested that, “with all due respect, my impression is that the United States are at a loss.” And opined that the U.S. has pumped “an endless amount of money” into the economy, and with nearly wholly unsuccessful results. The German Minister also said that the QE2 efforts: suggested that the U.S. model of growth was in serious crisis, undermine the United States’ policy credibility, and contribute to greater world economic unrest.

Obama has said about this so-called quantitative easing that, “the Fed’s mandate, my mandate, is to grow our economy. And that’s not just good for the United States, that’s good for the world as a whole.” However, if Obama expected this to be anything other than a bout of shameless propagandizing, he no doubt received quite a surprise, in the international collective thud of a response — and the concomitant chirping of the crickets. But then again, Obama has probably been hearing the chirping of this diminutive creature, just about as much as anybody; since he wooed a great deal of the world with his oratory, and promises of solving the problems that his impudent predecessor had brought about. He has shown a great propensity for doing what is politically expedient or popular, but an inability to present any sort of alternative, more visionary approach.

Sean Fenley is an independent progressive, who would like to see some sanity brought to the creation and implementation, of current and future, U.S. military, economic, foreign and domestic policies. He has been published by a number of websites, and publications throughout the alternative media.
seanm_f@fastmail.net

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