"God bless America and [SNIP] you all"

- God bless America and [SNIP] you all, (Malmsteen, Y. J, 2002).

That seems to be the philosophy Ben Bernanke has adopted with this new $600 b purchase in bonds. Bernanke has made his, the words pronounced by Yngwie Malmsteen back in 2002 during a show.

As an American I can be happy of having an increased power of purchase, but it's sad it has to be at the expenses of other economies of the world.

I know China hasn't played fairly these days by keeping lower the yuan, so now Fed and the US says:
- you know what? now I'll be able to buy more stuff from you with the same money I used to pay you before.

And China doesn't like that, so they'd be forced to rise the yuan and make their product more expensive to overcome that lose...and by the way letting other economies say: Hey! I have the same product cheaper than China!

I'm not an economist and I could be wrong in my understanding of the whole situation, but I've tried to explain it in the most simple way possible.

If I'm wrong, you're free to explain me better, but please don't be very technical so we the people that knows little about economic terms can understand.

Federal Reserve Chairman Ben Bernanke on Friday defended the U.S. central bank's bond-buying against beggar-thy-neighbor criticism, saying the return to a strong U.S. economy was critical for global stability.

He suggested doing so would bolster a dollar whose weakness has sparked cries of foul from Bogota to Beijing.

South African Finance Minister Pravin Gordhan said Fed policy "undermines the spirit of multilateral cooperation" that the G20 had sought to achieve. The money will find its way into financial markets of emerging nations with potentially devastating impact on their exports, he charged.

Bernanke said there was ample slack in the U.S. economy that will prevent producers from being able to fully price costlier commodities into finished products that consumers buy.

"Globally traded commodities like energy, food ... have been going up pretty sharply," he said. "Where there's a lot of slack in the economy ... it's very, very difficult ... for producers to push through those costs to the final consumer."

Reuters

I too am not an economist but feel you are wrong in your assumption that Americans have an increased power of purchase. Actually, I think it's quite the opposite. Flooding the system with money printed out of thin air should make commodities soar. Once commodity prices soar, you should quickly see just how much your power of purchase has decreased.

Gold, silver, cotton and oil are going off the charts based on their dollar value. Granted gold and silver aren't that big of a deal to most of us but paying $4 a gallon for gas will hurt like hell in a month or two. When my kid needs new clothes and they are 30% more than they were a few months ago, that will touch base as well.

Inflation seems to be inevitable and I see it as a hidden tax on the working class. I could be wrong...

Then again, I do love me some Yngwie Malmsteen music. However, he does need lessons on how to handle domestic disputes without hitting women.

Originally posted by metalpr
As an American I can be happy of having an increased power of purchase, but it's sad it has to be at the expenses of other economies of the world.

I'm not getting it... how is this statement consistent with your thread of just 4 days ago.. Fed easing may mean 20 percent dollar drop,

Which do you believe?

reply to post by Iamonlyhuman


that's the opinion of Bill Gross, my info is about the opinion of Ben....to be honest, I don't trust either.

reply to post by bozzchem


You sir are correct. Monetizing debts is also called "indirect taxation" and leads to all imported goods being more expensive. Hence so many exporting countries, like China, get pissed off.. we buy less of their garbage and for what they do sell in the conversion their bottom line takes a hit.

It is very simple they just decreased the purchasing power of the dollar and all other currencies related to it in any way. This will not help this is more of the same of what caused the problem in the first place. it is the same as trying to pay off your credit card by going further into debt except on an unimaginable scale. They have no money to pay the debt they they borrow or create it out of thin air. It is a national unlimited credit card so to speak they never pay it down they just continue to borrow on it. But the effect is it inflates the economy until no one can afford anything. The whole world economy is based on this perpetual expanding credit scheme which is why it will crash.

It will be a global bankruptcy...there is no other way.
All nations on the entire planet have so much debt there is not a hope in hell of repayment...ever.
They have no choice but to scrub all debt and start fresh.
Clear the chips from the table and start over...There's no other choice.

It will piss allot of people off, specifically those who have money.
A multi-millionare would now be equivalent to your local trash collector.
It will be a complete global reset to keep all nations complacent and fair.

People with wealth will lose all their money...there will be no places to hide.
It will be a total restructure of global currency...a new beginning.
More than likley a world government to enforce it.

Times are changing.

is it bad?