The United States is critical to keep the dollar value of the acceptable range (expensive) for two

The United States is critical to keep the dollar value of the acceptable range (expensive) for two fundamental reasons. For reserve status, while preserving the credibility of the world trade contractors side (most active international commodity markets traded in dollars) and of governmental structures slide warmer side (reserve status provides slide warmer conducted national reserves slide warmer in dollars, shutter speed). The second reason slide warmer - it is a high dependence on foreign capital investment inflows, which have the highest volume comes when the national currency is growing or at high levels. Japan can not afford to weaken the yen and the US - not as long-term Japanese bond state not more than 5% of foreign capital, while in the US - nearly 50%. Therefore, the US, under the conditions of QE3, not so important to a positive slide warmer trade balance, but much more important is the positive financial balance of the balance of capital, investment slide warmer demand slide warmer for long-term preservation of dollar assets and confidence in the currency.
At the same time, is done everything possible, so that whenever the issue tremendously nothing unprotected virtual money under the conditions of QE3, the dollar slide warmer would be expensive. It takes place from two sides - the geopolitical tensions, the US targeted, information or propaganda tools during active manipulative pressure (including currency) is composed pertekimas money from other areas of currency to the dollar zone. In short, the US success in the global slide warmer arena is heavily dependent on international confidence slide warmer in the dollar and half dollar contractors active demand.
If the value of the dollar will start to fall, the deficit in available resources, maintain a steady flow of high financial capital, it will be very difficult. For example, the European Investment Bank wants to buy US state bonds for three years, the conversion of 1 million euros by 1.3 rate, while buying bonds with zero profitability for 1.3 million dollars. If the rate of EUR / USD rises to 1.6, the European bank will recover only 812 thousand. slide warmer EUR getting losses. Who is smarter, through the derivatives market buys forvadines (future) three-year contract with the EUR / USD hedging against slide warmer the falling dollar. However, in any case, the current conditions are preserved during an active demand for the dollar value of the dollar falling, it will be very difficult.
In this case, the euro has cost more, according to the European Central Bank's balance sheet at a reduction of the Federal slide warmer Reserve System balance sheet growth. In the current CB balances correlation, the adequate level above 1.4, but by the fact of not more 1.3, due to the cheap euro Eurozone interest, in order to be supported by the German trade balance and US dollar interest dear, his confidence in support of the money at the issue, after 85 billion slide warmer $ per month.
These markets have long gone. Now, almost every major developed market lends, or lend it the Japanese market or England, the US and lose say, they are all full of central banks and primary dealers in the hands of extremely low interest rates preservation. It will be recalled that the interest rates on the basis of state paper of paramount importance in a particularly high state debt / government slide warmer revenue of relationships, and what is happening now. Weighed average interest rates rise, even 1% can lead to paralysis of the state budget due to the increased percentage of expenditure.
In order to prevent the growth of interest of the central government and the CB in collusion with primary dealers and large investment funds provide nearly slide warmer 100% of the debt market presence and retention of interest within reasonable limits. That's why the US bond or Japanese securities in respect of the income has not increased. slide warmer In other words, the agreement between the CB and dealers Essence of government securities dealers guarantees placement and acceptable bid to cover (cover price) interest rates, and CB dealers ensure no-limit unsecured liquidity and percentage fees. In the past, there has not been anything like it. This is a new experience.
Why are massive emissions from the Federal Reserve System and the Japanese CB, industrial metals and oil value falling? Comes to work with QE2 errors. As you well remember, a distinctive characteristic of this program was practically parabolic almost all commodities growth. This has led to an economic recession slide warmer or, at least, to a serious negative effect on the economy, as the US, England, Europe and Japan - that importers of raw materials, so the rise in prices of raw materials has become a cause of cost inflation. On the one hand, this was reflected in the economic viability of the cut, on the other, have contributed to the rise in prices, because many companies perleidinėjo costs to consumers. Under the conditions of stagnation in demand, output price growth is become the cause of stagflation - prices rise, the purchasing power falls, the real demand for very low rates.
In order not to play with fire