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3.23.2009

American Federal Reserve Committee offer some ideas, let money go, China what is to be done?

Gram offered some ideas at last, announced the purchase bond of over thousand billion dollars registered capital to the market plan in the south of the uncle, president of American Federal Reserve Committee, though external world have expectancy early, unite store whom office sell fast generous and unexpected, the beautiful debt price rises by a wide margin at one time, earning ratio goes back urgently, the interest is expected to drop, also make U.S. dollar urgent and fall at the same time, the gold rises, the stock market is stimulated upwards.

Uncle the south grams of this measure, to save U.S.A. economic crisis, of great significance. American Federal Reserve Committee buys the debt and registers capital to the plan, draws up a check to buy the debt or let people bring the debt to discount, equate with and derive and pay the currency of many trillions of dollars in the system of the bank, in brief, draw the low interest, is forcing the bank to borrow the money and go out, i.e. pour into flowability to the market in order to stimulate the economic recovery. The move of gram of the south of the uncle has achieved the obvious result. The market responds enthusiastically, a lot of investors are attracted. The 30 -year loan interest rate of fixed room of U.S.A. is dropped to 4.5%, it is the lowest over 100 years, so, the house market is expected to begin to recover, meanwhile, the operating costs of American enterprises will be reduced therefore by a wide margin too. The most optimistic view, U.S.A.'s economy will be possible to recover at the beginning next year at the end of this year.

Certainly gram suffers much criticism too in the south of the uncle, this measure can also find out the economy of U.S.A. is really very poor, forced American Federal Reserve Committee to have to stake everything on a single throw. Criticized in order to emit " Understand and swell beasts " Danger exist. Even if economy takes a favorable turn, American Federal Reserve Committee will retrieve the currency, may meet the difficulty, just like inertia after bringing to a halt, will produce the unfavorable consequence. But in the crisis once in a blue moon like this, American Federal Reserve Committee can only accept the lesser of two evils, have no other way out. In fact, compared with White House being too noisy to have a rest, the amazing economy of Palestinian horse plans not to find out the result so far, one gram of this methods has the one that shows the result in the south of the uncle. The critic looks on gram of the south of the uncle and carries a load straining, in fact no one takes out better method.

As the well-known writer of American Federal Reserve Committee may lead to the fact inflation and U.S. dollar devalue to buy the American debt, pluralism and issue of risk, foreign exchange reserve of Chinese, pay close attention to the fact further. It is very normal that everybody pays close attention to the investment risk of the foreign exchange reserve. But so long as make the investment, there will be risks. Without risk investment be existed, little ordinary people, invest in stock debt, no has no risk, even if deposit the money in the bank and does not move, the risk devaluing exists. Nobody makes money forever, Buffett such as the big investor, when big crocodile Sorrows all diminish hands.

Reality can only hope the U.S. dollar assets are relatively safe, to the foreign exchange reserve entering the international capital market, control the risk as much as possible. Vice-president of People's Bank of China Xiao Hu smelt, show China can continue, invest in American national debt 23, but will highly pay close attention to the fluctuation of American national debt assets value at the same time. Financial eldest grandson of department department XiaoXia of the Ministry of Finance says, seen from the present, chooses the U.S. dollar assets to remain the relatively safe method to Chinese foreign exchange reserve. The fact is like this, the pluralism of the foreign exchange reserve is essential, but the pluralistic choice can only follow the actual conditions to operate, compare with buying the beautiful debt, not only restricted by the scale and other factors, the risk exists equally too. For example buy other external debts, Britain, Central Bank of Japan are purchasing the debt of one's own country now, the possibility devaluing can be seen too, the risk exists equally.

Can buy possible a large amount of gold too for another example, but the trade between the main world economies still settles account by U.S. dollar, European dollar or Japanese yen, if the country needs cash of foreign currency, while getting out the gold in a large amount, the possibility that may be demanded a lower price on purpose exist, if so losses can not be small either. It is a wise move too to buy the energy of petroleum, but the oil storage ability of China is limited at present, can only hold 73 million barrels at most, has had no place to put to buy more according to present ability. Other strategic materials with some kind and merge the overseas assets and can be consideredding, but can't totally substitute the American national debt in fact.

As for the American debt, based on the secular trend, it is no doubt risky to take no action, but sell off and should go on safely progressively because of fluctuating, the American national debt number which China holds is huge, if act rashly, probably because the chain effect will aggravate losses. It face a difficult choice it exist really,how not to advance and retreat have according to,to Chinese Government being getting more heavy to test.

U.S.A. is the capitalist country, hope a capitalist country is when in the crisis by oneselfing, will fully consider the interests of other country, it is unrealistic. Self-help is better than help from others! China is still a strong and fragile country at present, when manufacturing industry of China has production efficiency to improve and innovate the key competitiveness formed constantly, no longer only depend on the advantage of products rate of exchange. When China has sounder and stronger financial circles, RMB begin from converting freely, and then occupy the position of the advantage, China could really become an economic giant.

That sentence: Development is an absolute principle!

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