There are elements to think that the US private sector will be more willing in the coming years to maintain a higher savings rate. The strong destruction of wealth caused American families by the outbreak of the crisis in subprime, is one of the main elements that feed this possibility. While we are talking about an improvement in the current account through a decrease in domestic absorption, United States must also achieve an improvement in the external accounts through an increase in exports of goods and services. It is that the lower fortress which is expected to have in the future domestic consumption, must without major alternatives be compensated with external demand and there is once again the weakness of the dollar appears as a possible path. He said that the weakening of the dollar generates its risks. The possibility of an inflationary shock is latent. The decision to keep the interest rate of reference at their lows at least until the end of the year is already ahead from the Federal Reserve. Is aware of the emergency Fed withdraw excess liquidity in the economy with the highest possible speed to avoid not only feed inflationary expectations but also to prevent the development of a new bubble that could be brewing at the moment? I certainly don’t think that need to underestimate the ability of the members of the Committee of the Fed’s monetary policy.
Perhaps part of the strategy of the Fed or product of political pressures, but maintenance of the interest rate in a historical minimum level has several effects. The immediate reversal of the policy of interest rates of reference, with a sharp rise in the same would endanger the economic recovery, a situation not desired by the Obama Government. After all What matters is that the economy grows. But the strategy could be considering other effects desired by the U.S. Government. Despite the risks that can generate for the stability of the economy and the global leadership of the United States, an increase in the inflation rate may not be as frowned upon after all. A solution to the underdeveloped can do that the United States should decide through this mechanism, liquefy part of its huge debt. In this complex context, arises increasingly necessary coordination of macroeconomic policies among countries.
The large global imbalances have not ceased after the crisis and promise to generate destabilizing effects. A change of strategy from China, orienting itself towards its domestic market and us looking to its trading partners to grow, is an interesting alternative to begin to decompress the tensions in the global economy there is room to see a thrifty American economy and a consumerist Communist china? Although it is highly difficult, the crisis we have proved that nothing is impossible. Horacio Pozzo the best time to invest in Wall Street: + 20% in 60 days want to know where to invest your money? You can enter here to find out and start investing in the new recommended in August. Already arrive in September! Write me at for more details.