Fed official: U.S. dollar will remain strong next 10-15 years

Fed official: U.S. dollar will remain strong next 10-15 years
At 00:47 on January 9, 2010 Source: http://www.shiweilai.com shiweilai "While the yuan is being settled through the cross-border trade, currency swap agreements, the issuance of renminbi-denominated funds overseas, such means as strong abroad, but with each days up to 5 trillion global settlement amount of U.S. dollars compared to the world's reserve currency, but a minor; even as the world's two other strong currency, the euro and the yen, but also difficult to transcend and replace the U.S. dollar in the next 10 to 15 years , a relatively strong U.S. dollar remains the world's currency. "January 7, as a branch of the St. Louis branch of the Eighth Federal Reserve Chairman, James Bradley in Shanghai to attend a small-scale speech, after he accepted the Daily News reporter during an interview for the case of the RMB and U.S. dollar trend analysis.

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Economic recovery, the Bank of England to mention the bumpy road out of New Finance Minister took a strong yen will turn around and raise interest rates remain a distant U.S. dollar faces an uncertain future in the yuan and U.S. dollars at the end separated from the second quarter of 2009 the foreign exchange platform for the most popular selection [yuan license] [Quotes Center] When asked about the Fed's monetary policy this year, what changes will occur this year, U.S. dollars, euros, yuan in the end which will be the first interest rate increase and other issues, James Brad chose the ambiguous answer, but this year the United States and global economic development, then the optimistic attitude.

"China Times": the financial crisis made the United States, many financial institutions are facing a hopeless situation, the Federal Reserve to financial institutions through a variety of means blood transfusion, at the same time in order to increase market liquidity, in turn the Federal Reserve lowered interest rates to almost zero, does the Fed's injection is a dollar by printing the way? Now the U.S. economy has been showing signs of recovery, the dollar's low interest rates will come to an end?

Brad James: not so in the comments of the outside world, many people think that the U.S. government will be printed more money, but in fact the Fed is not printing money, we and the Government to do a huge bailout to save paragraph by " E-type "(Electroic Entry) way to do the accounting book on the treatment, without using actual money.

And since the crisis broke out, we have to save the market, resulting in rapid expansion, therefore the balance sheet. But in fact, our bailout money is not mainly from the currency. But from the following three chunks: the first one is the funds raised by selling government bonds, from July 2007 to the end of 2008, our net debt balance of a decrease of more than 3000 billion U.S. dollars; second block of the Ministry of Finance of special deposits, in order to deal with the financial crisis, the U.S. Treasury Department in addition to increasing the general deposits, the central bank has also its opened a new "supplementary financing account" the two types of account balances in the aforesaid period of time a net increase of 400 billion U.S. dollars; third block is through the payment of interest means to attract financial institutions to increase the reserve deposits. The balance over the same period a net increase of 800 billion U.S. dollars. Three are added together, the total cumulative amount of money up to 1 trillion U.S. dollars, for us to save the city provides a very ample "ammunition."

Now, the U.S. economy, whether the real estate market, or the consumer market into the bottom of the second half of last year, after a slow recovery process, the overall U.S. unemployment rate is still high, but its growth has started to slow down, for the United States this year's economic situation, I am very confident. In the economic crisis, we will be the Federal Reserve lowered interest rates to almost zero, this situation should continue for too long, because the U.S. economic recovery, the situation is not very solid, Federal Reserve monetary policy change is to look at the actual situation and whether to adopt the policy interest rate to go through the members of the Committee voted to very carefully.

"China Times": Now, China already has more than 2 trillion U.S. dollars in foreign exchange reserves, now the U.S. dollar is in a weak position, the outside world have predicted U.S. dollars in the next five years, will continue to depreciate this how you see it?

Brad James: Yes, we are also concerned that China's foreign exchange reserves have more than 2 trillion U.S. dollars, of which the main assets, mainly U.S. dollars, this is actually its foreign currency features and the pattern of international financial market decisions. In the global financial markets, the U.S. financial markets with the greatest variety of products, the largest and most liquid, most transparent, so the world's foreign exchange reserves are in U.S. dollars of assets and investments mainly in the U.S. financial markets.

In the global foreign exchange trading, the dollar share of transactions in other currencies as high as 90%. In this environment, the foreign exchange reserves, more countries would want to invest in non-dollar assets, as the main target, it must be because of market size and liquidity of the limitations of greater risk, such as the price of investment products, a result of the proposed small-scale and so on are easy to raise.

I do not think the next five years, the dollar will continue to depreciate, in the world's major economies have increased the money supply were the case, I expect the greatest possibility is that the economic recovery ahead of schedule and long-term inflation risks, rather than the U.S. dollar continued to depreciate. In the short term, we will maintain the relative stability of the dollar in order to attract foreign capital inflow, to help our economy out of the woods. From the long term, the dollar could even turn into a secondary school derogatory to the appreciation of the main cycle.

"China Times": In the last year, the eve of the Group of 20 finance ministers meeting, China's central bank governor Zhou Xiaochuan has issued a document initiative to create a super-sovereign currency to replace the existing U.S. dollar's status as the world's reserve currency, the RMB is now through a variety of to expand influence in the world do you think the U.S. dollar the world's reserve currency will not be another currency substitution?

Brad James: We see that the renminbi is now indeed being through a variety of ways to expand its world impact, but this effect is only confined to East Asia, within the current international monetary situation, the world's three major hard currency, namely U.S. dollars , the euro and the yen, which is not big enough the size of the yen, the euro itself, because there is no an actual individual, so the dollar in the next 10 to 15 years, is still relatively strong global currency. RMB internationalization process will be very long, the dollar's international status is now is not overnight.

The world's currency reserve system will certainly change, but it will be a slow process. The Fed's task is to maintain a low inflation rate and the dollar's strength.