經濟,財務,統計學,數理科學與政治評論

Dear American people:

 It is time to take a serious look at the US dollar appreciation and Fed increases rate issues. Let's talk about the pro and con of those issues.

(1)The US dollar appreciation

 Pros -

 a. American people can buy cheaper import goods

 b. American people can use its appreciated currency to redominate the international affairs of trade

 c. American people can take advantage of the US dollar flowing back to the USA

 Cons -

 a. The export-depended industry or corporation are hurt by too strong US dollar, the US corporate profit will be largely reduced by strong US dollar

 b. Too strong US dollar may not let American people to redominate the world trade but to increase the import from China since China can sell its good in a cheaper price. The latest information shows the US trade deficit increases to goods imported from China

 c. Too strong US dollar may not let all greenback go home as the US stock market and bond market are rally too many years already. It is time to think about the issue that if the fiancial market should not go up too much.

 d. It hurts the export of US agricultural products and US beef

(2)The Fed decision about the rate raising

 Pros -

 a. Redirect the US dollar back home because of the rate increase

 b. To tame down the unnecessary of financial speculation

 c. To rebuild the financial order of domestic financial market, especially for those people who pursue their retirement life safe and sound

 d. To let the interest rate level go back to its normal level in order to cope with the next recession

 Cons -

 a. It will increase the burden of car loan, mortage loan and student loan of American people

 b. It will increase the burden of US corporation's cost of capital, especially the SME (Small and medium size) companies because they can not issue corporate bond to collect the fund in a cheaper way

 c. It may increase the expectation of US dollar appreciation in the future

 The ways to resolve them

 a. The US Fed should declare its goal is to let the interest rate back to its normal level, but what is the normal level still needs to be coordinated with the macroeconomic situation

 b. The US Fed should declare it may raise the rate only a couple of time, and to what level, then it will stop and recosider the whole situation. The Fed should set a goal to some level, for example 0.5% or 1%. Then the Fed stops to raise rate to see where the economy goes with that situation.