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- Nov 15, 2009
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- Very Conservative
First off, the President does not control monetary policy. Secondly, on a fundamental level, China's RYB is completely undervalued given their $2 trillion of reserves sitting in the Bank of China.
Nations in which we have a large current account deficit should, on the basis of balance of payment fundamentals, expect the dollar to continue to devalue.
We buy more from our trading partners than we sell, leaving them to hold $485,000,000,000 in dollars at the end of the day. What do they do with these dollars? Purchase dollar denominated assets such as US Treasury securities (virtually risk free), oil, AAA rated private debt, etc....
A devaluing currency is response to a continued negative current account balance. Of course there will be short term fluctuations due to the speculative nature of forex traders. But in the long run, a stronger US economy will push the dollar forward.
So the question is: Do we allow our currency to appreciate by purchasing less foreign goods? Something tells me they wouldn't be happy about that either. This is not a partisan issue; you should be happy we are finally standing up to the world (who depends on us to purchase their goods).
This president had a filibuster proof congress so much of what has happened is on him and his party.
The deficit has increased under him at record rates so yes he signs bills causing this.
World To Fed: Stop Printing All That Money - Investors.com