Stiglitz: America's Federal Reserve Devalues The Dollar Just Like China Does With The Yuan


From the perspective of foreign nations, the U.S. appears hypocritical when it criticises other nations for purposefully devaluing their currencies in order to gain export competitiveness.

That’s because America has been doing just as much for a long time already, via the Federal Reserve says economist Joseph Stiglitz:


The Fed, having created the problem in the first place, feels guilty and says, ‘We should do something to get us out of the mess.’ […] [Emerging markets] see this as competitive devaluation of the United States. We say, ‘No, no. We’re not engaged in competitive devaluation. That’s something China does. We don’t do those kinds of things. We don’t manipulate our currency. All we do is ordinary monetary policy.’ But the consequence of ordinary monetary policy is competitive devaluation.

You can probably take his words a step further and point out that current American monetary policy is far from ordinary, given near-zero interest rates and central bank purchases of government bonds.

You can see video of him speaking for an investment seminar at the Canadian consulate here.

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