This post lags behind last weeks debate in which Presidential Candidate Mitt Romney pledged to accuse China of being a currency manipulator, but in yesterday's Wall Street Journal opinion section, an article entitled "Ben Bernanke: Currency Manipulator" gave the case that Federal Reserve policies force the rest of the world into unfair situations.
The article details this argument using Brazil's reaction to Ben Bernanke's proposal of a third round of Quantitative Easing or commonly QE3: "Brazilian Finance Minister Guido Mantega has complained bitterly about it because in his mind the higher relative value of the real makes Brazil worse off." While the U.S. must rely on its central bank to help get this country out of the recession, Ben Bernanke has no qualms about stepping on other countries' toes. Obviously, Americans want to get back to manufacturing and producing goods for export, and by lowering the value of the dollar, this should lower the price of our exports, thereby increasing the amount of exports. However, with the dollar as the world's reserve currency and the U.S. economic dominance in question, how far can we go in upsetting the international community before opinions about this country turn sour? Taking this a further step: if the U.S. continues to print money "at a rate of $40 billion per month with no deadline" will this accelerate a change in the world's reserve currency?
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