Distinction in travel journalism
Is independent travel journalism important to you?
Click here to keep it independent

6 Sep, 2011

US dollar depreciation will not fix debt dilemma – People’s Daily Online

As the U.S. debt dilemma evolves, market players speculate that the United States will try to solve its debt issue by depreciating the U.S. dollar once again. Will the United States launch the third round of quantitative easing? The Chairman of U.S. Federal Reserve Ben Bernanke has postponed the answer to this question until the latter part of September 2011. If the United States launches a new round of quantitative easing, the U.S. dollar will depreciate. However, can the U.S. debt issue be solved this way?

In the 1980s, the U.S. economy fell into stagflation and was troubled by both financial and trade deficits. In 1984, the trade deficit of the United States reached 109 billion U.S. dollar, of which half came from Japan. In September 1985, in order to re-energize the foreign trade, the United States reached a package agreement of international economic policy coordination in the New York Plaza Hotel with Japan, Germany, the United Kingdom and France to promote the orderly depreciation of the U.S. dollar against other major currencies. In the next three months, the U.S. dollar depreciated 20 percent against the Japanese yen.

via US dollar depreciation will not fix debt dilemma – People’s Daily Online.