QE3 and the European Debt Crisis: How will China react?

Europe is struggling with its sovereign debt crisis, and Ben Bernanke just announced the Fed was prepared to increase the money supply. A potential QE3 and the European sovereign debt crisis can significantly impact the dollar and the euro. How do you expect China to react to fluctuations in the dollar and the euro?


Ask.com Answer for: qe3 and the european debt crisis how will china react
European Sovereign Debt Crisis
Greece is returning to global capital markets for the first time since the disastrous collapse of its public finances triggered the eurozone crisis four years ago. The Eurozone crisis is an ongoing crisis that has been affecting the countries of the Eurozone since late 2009. It is a combined government debt crisis, a banking crisis and a growth and competitiveness crisis.
3 Additional Answers
Ashley Ingle (Currency Broker, Ashley Ingle Currency Broker)
We havent seen any great movement with the eur-usd exchange rate. both currencies had had a toorent time in the market and the GBP, CHF and JPY has benefited. China is a strong country who had power to invest and influence other traders as they like to 'follow' chinas trades. China still keen on Euro Bonds, if ECB are still investing in these too! You will find whatever China does and invests in, will have at least a small influence in the Dollar and euro day by day, week by week depending on commentary. Im sure China will still support US long term investments too.
Stafford Williamson (President, DaoChi Energy of Arizona (div. of Williamson Information Technologies Corp.))
Last weekend Bill Maher had on his Real Time, one of those guests you expect to be fairly boring. His guest was fairly entertaining in as much as she attempted to fit into the format and the humour of the programs when she responded to Bill's question about the current state of the economy and the short term outlook by asking, 'My question is, I mean, just how fucked are we?' Christine Romer, former Chief Economic Advisor to the Obama administration, replied through a laugh, 'We are pretty dam fucked!'

Now those are harsh words from an economist. You can double that emphasis, perhaps, because she was also specifically the Obama's lead point 'man' on economic matters, but it is worse than that, Christine Romer originally came to fame with a book she published revealing heretofore inceptions that caused most economists to see the great depression in a whole new light. Whether anyone else who has had some time to think about it, may have realized too, fhat her vision for the future might also be the bright light from the end of this tunnel.

Ms. Romer remains a loyal citizen and available to consult to the President, if asked, but I think that perhaps she may see Some economic measures are more obvious than others. Ending both wars on schedule looked very little if at all like an 'economic' policy, but of course it is. Hundreds of Billions of dollars will be saved each year. The industrial military complex will be fairly busy for years-to-come, based on orders and replacements needed.

It also appears only 'politic' to allow the Republicans to take the blame for all the Bush era Tax cuts going away completely (including for the middle class) as the 2012 election heats up in January. And in combination with that Senator Bingaman of New Mexico managed to slip some legislative rulings past the bi-partisan Senate comnittee for Enegy and Natural Resources that establishes the Clean Energy Deployment Administration, charged with enabling new technologies (especially had to finance ones) to scale up to commercial deployment by issuing bonds, loans and loan guarantees and any other such financial instruments as they feel would be appropriate to accomplish their task.

(Continuing below)
Stafford 'Doc' Williamson
Stafford Williamson (President, DaoChi Energy of Arizona (div. of Williamson Information Technologies Corp.))

So how are the Chinese going to react to QE3 and the softening of both the US$ and the EU's Euro? Chances are fairly good that they will be picking up both the US and EU currency to keep their currency somewhere close to the historical ratios of recent years, because anything less than a mildly positive reaction will be interpreted by much of the rest of the world as being a harshly aggressive move that it could end up devaluing of the Chinese Yuan (aka RmB)

Furthermore, debt issued by and/or land or mortgage and loan guarantees from the US CEDA can be a more accurately targeted stimulant to economic development and jobs at home, in the US, but if properly aimed at export sales (including the promised hot documents [as yet unavailable] to ensure that the Fed maintains its promise of zero (or near zero interbank rate for at least the next two years) This can be a very healthy dose of booster to getting the biofuels industry off the ground and ready to meet the already heady demand for biofuels to blend into future aircraft fuel tanks (resulting in significant cleaner skies). Both the US military and Worldwide civil aviation have made significant commitments to rapid deployment of biofuels over the next few years.

It is my hope and belief that the only way to keep up with the overwhelming growth in this area in the near future is to start to EXPORT the technology and the technical knowledge to build thsee items. The more places GROWING their own fuel, the less demand for it. It is my hope then, that this will also form a new source to fund such exports and will thus also become an adjunct of the CEDA that is new kind of high-tech Export Development Bank, in effect.

Love and warm wishes,
Stafford 'Doc' Williamson
DaoChi Energy of Arizona (div. of Williamson Information Services Corp.)
Q&A Related to "QE3 and the European Debt Crisis: How will China..."
I haven't talked to any individuals however, the governments were approaching the problem mostly with austerity measures which was driving them deeper into a recession. Greece and
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