經濟,財務,統計學,數理科學與政治評論

Dear American people:

  It is the issue American people have to face lately-the true nature of US dollar. It is a conflict or a dispute on whether the US dollar should go up or down. If the Fed trims down its balance sheet by selling those securities back to the financial market, we will see a large decrease of US dollar supply all around the world. Then we have to face an even stronger US dollar in the near future. If we see the Fed increases the Fed fund rate little by little rather than rebalancing its balance sheet too much, then we may see the US dollar moves in a slow motion and becomes even volatile as the Fed increases its pace to have a higher base rate. The former or the latter may not be that good to whole American poeple. The US is not stronger enough to face those problems as used to be. A lot of American people have no money in their pockets and a large sum of student loan on their shoulders. The US corporations depend largely on international trade these days. It is a fact.

  The other reason is due to the fact that the US has its technology advantage over other nations and the value is needed to be shown from a cheaper US dollar. If the US dollar appreciates too much, it may hurt the value of offshore earnings of international US corporations. Those technologies have their values for other nations but they may be needed in a cheaper way. People may disagree with this viewpoint as the outsourcing is easy to be done by international US corporations and the growth of those corporations can still be fulfilled in a stronger US dollar environment. I doubt this kind of statement. There is anohther viewpoint which points out the time to focus on the US domestic growth is coming. This may be true if Amercian people can grow by themselves without trading with others. BUT the US corporations still need to sell software products and related services to other nations which can bring huge profit to the US. The US international corporations do have many advantages to run the same kind of business compared with other firms in the world. A stronger US dollar may hurt financial book of US companies. The profit of internaitonal US corporations will go down more than we know when the US dollar appreciates much more. It is a conflict between the US Fed policy and the US corporations.

  From the stand point of American people, a stronger US dollar means that people in the US can enjoy cheaper import goods. The increasing comsumption power of American people gets from stronger US dollar. The history shows that American people know how to take advantage of stronger US dollar. It also shows that American consumers could decide what the world needs. But I have to remind all American people this time is different because the US has 17 trillion debt in hand lately. The consumers in China already replace the role that American people had. China is the first trade partner to many nations and regions. The biggest trade partner of China is the Euro union rather than the US. It is the real issue what American people do not need to consider two decades ago. It is a price to pay to let more than seven million American people have decent jobs. So the problem  goes to the big issue that is how the Fed could resolve the conflict between a stronger US dollar and the profitability of US international corporations and how the Fed can let American people have their payrolls increased instead to hurt the US currency credibility. It is a serious issue American people have to face.

  From the other perspective, those nations like Brazil used to issue the US dollar-dominated sovereign debt. Those nations will be hurt a lot from a stronger appreciation of US dollar. It will hurt the trade relation between the US and those nations. The US investors would also be hurt. Those countries also includes the Ukraine and other nations who depend on the US heavily to rebuild their dire nations. If the US dollar goes even higher, it is expected the emerging market debts, especially those ones with US dollar-dominated non-US sovereign debt issues, will be hurt even harder than we know. It is bad to the whole world.

  The US links itself with other nations in a tigher situation in decades. If others go down, it means that the US may go down as well. If the US can find the way to have more than three percent GDP growth each year without other nations' help. It is fine to have a stronger US dollar currency. But if it is not the case, then the Fed still needs to know it well on the too-stronger US dollar issue. It is what the globalization means and it is an another issue that the Fed has to consider. A stronger US dollar may hurt those US domestic investors such as the CAPLERS or the Yale University foundation as well. The world is closely connected under the US dollar flow. That is what an international tradable currency means.