Not necessarily:
Financial Times - Brazil’s finance chief attacks US over QE3
Brazil of course is a member of both BRICS and the Fragile Five.
-----------------------------
Understandable, but to blame QE for all of Brazil's problems is a clever bit of misdirection.
O’Neill Says Brazil Criticism of QE3 No Fix for Economic Woes - Bloomberg
With controls on inflows still in place, the real has weakened 24 percent since July 2011 and is little changed since QE3 was announced. Trade Minister Fernando Pimentel said Oct. 18 that the government wants to keep the currency stable at its current 2 reais per dollar rate so exports stay competitive amid the U.S.-led “monetary tsunami.”
...
“It’s a shame because it draws their attention away from doing other more important things, such astax reform and other measures that could improve competitiveness,” Franco, who is also the founder of asset manager Rio Bravo Investimentos, said in a phone interview from Rio de Janeiro.
O’Neill said Rousseff’s recent moves to lower borrowing costs and shift to private investors the burden for developing the country’s infrastructure were steps in the right direction. The central bank has reduced interest rates 525 basis points since August 2011, more than any other Group of 20 nation, to a record 7.25 percent.
Still, Brazil’s benchmark rate is the highest in the G-20 after Russia and India, making it a magnet for investors borrowing at near-zero rates in the U.S., Europe and Japan.
At the same time a surge in public spending and loans by state banks to propel growth are adding to inflation that’s running above the government’s 4.5 percent target since September 2010, limiting the room for further rate cuts.
...
Another distortion is Brazil’s own protectionist push, which relieves pressure on manufacturers to become more competitive. Last month, the government raised tariffs on hundreds of goods ranging from petrochemicals to steel, drawing a complaint from U.S. Trade Representative
Ron Kirk.
Let's not kid ourselves, everyone is involved in currency manipulation. The US does it, China does it, Japan does it, even Brazil does it. Brazil needs structural reform, not complaints about how US manipulation is more evil than Brazil's manipulation. Brazil can't respond effectively to the hot money effects on its economy because its economy cannot efficiently utilize capital.
That's not to say that I am a supporter of QE, because it's caused hidden inflation here in the US, which I resent.
We must succeed in this, we cannot depend on the good will of others. We can hope for it, not depend on it.
Who is to say America is not satisfied with sanctions on Iran, Russia and Syria? Maybe we will be next, who knows?
Politics is the art of the possible. China and Russia are simply too large and too integrated into the global economy to sanction without harming ourselves (or Europe). Iraq, Iran, Syria, North Korea are all fairly easy to sanction because they themselves have chosen to remove themselves from globalization in order to dominate their populations with an iron fist. China and Russia may be able to build an alternative to SWIFT, but that will come with its own costs, of course.
This is certainly unwelcome news, but isn't it the mirror image of Sydney's or Vancouver's housing bubbles?
Chinese Homebuyers Thronging Sydney Make Mini-Bubble Frenzy - Bloomberg
And then there's our previous discussion, where China can use its growing forex reserves (reserves acquired, in large part, through currency intervention) to acquire assets abroad.
QE is harming specific markets more than others because those markets are more open to capital. QE is a nice, simple explanation of everything that's going wrong in the world, but there are deep structural factors at play as well. QE wouldn't have nearly the effect we've seen on emerging markets if capital could be allocated more efficiently to profitable projects instead of inflating real estate bubbles.
The leader of the group is Goldman Sachs, the bankers involved are Paulson and co. The target is Chinese stock market. The goal was to replicate George Soros' success in destroying Southeast/part of East Asia's economy in 97. By crashing these countries' economy and cause these country's currency to hyper-depreciation against USD, these country's assets becomes ultra-cheap to be taken by US and IMF. Of course, due to China being socialist, the government responded with political intervention. This is one of the reasons China and Vietnam are much more resilient against the financial crisis in 97 than their neighbors.
It's hard to believe that the US would intentionally make Chinese exports even more competitive, leading to yet more offshoring of manufacturing. China does not allow unrestricted acquisition of assets, in any case, and strictly controls what sectors are open to foreign companies, and the degree of openness (minority stakes, JVs, majority stakes, full ownership). Such a conspiracy is not practicable.
Besides, the US didn't go on a buying spree of Asian assets after the Asian currency crisis. The US was busy with its dot-com bubble at the time, and saw itself as the greatest destination of capital.
and trading rubles in dollars to buy chinese products isnt?
Chinese and Russian companies can write contracts in any currency they want. Why would Russian companies use dollars to buy Chinese products?
