US does not want to follow the recovery method that US did in 2004. At that time, even though quantity of the household debt was dramtically soared, US consumption that was supported by the housing bubble did a rold as a global demander. Emerging market countries sold enormous goods to US, making them accumulate considerable foreign reserves. After QE1, most of emerging market countries did block the inflow of hot money that was derived from QE. After QE2, commodity market was in the control of the Volcker Rule, the rule that keeps the specuation from getting capital gain in commodity market. Because of such side-effects of QE1,2, most of money was likely to be gathered in US asset market, driving all of assets in US to be appreciated, the assets that are stock, bond, real estate (REITS), and even USD. On the other hand, the emeging market countries that have potential as a global demander are inclined to continue tightening monetary policy to control the demand bubble. Provided that FRB continues QE3, demand bubble will reoccur in US again. The major policy of Obama administration is export that will resurrect US manufacturing. To control the symptom of asset bubble in US and to make emerging market countries that intend to be improved not by domestic growth but by export to US be disappointed, it was essential for FRB to announce the future road map of "exit strategy". In the future, we can experience the emerging market domestic bubble that is very similar to that of Japan in 1980s.
Posted on: Sun, 23 Jun 2013 22:25:18 +0000
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