The disparity between Japan and Europe on
quantitative easing has led to a sharp appreciation of the euro relative to the yen--putting German jobs and profits at risk, especially in export industries that directly compete with Japanese firms in world markets such as automobiles, heavy capital equipment, high-tech goods, chemicals, and so on.
Critics on the left and right blast policies of
quantitative easing from the US, UK and Japan, suggesting they have led to rising inequality
These include financial market and capital flow volatility brought about by Fed s
quantitative easing tapering, and fragile growth in certain emerging economies.
The US Federal Reserve Vice Chair Janet Yellen clarified to the Congress last week to maintain the
quantitative easing policy until national economic recovery shows, while such announcements are well known by investors, and they have no serious effect on the gold prices by now, it added.
He emphasized that the original purpose of
quantitative easing is to boast domestic demand, and urged efforts to prepare for an orderly exit from
quantitative easing programs.
The bank's
quantitative easing programme stands at [pounds sterling]375bn, but 70 percent of those polled think an extra [pounds sterling]50bn will be injected soon.
The Fed decided Thursday to implement additional
quantitative easing through increased asset purchases, seen by market players as a third round of
quantitative easing, or QE3.
The downward effect of
quantitative easing on local pensions happens because the annuity income pensioners are promised tracks the interest rate the government pays on its debts.
The no-change decision came despite a call from the British Chambers of Commerce to increase its support with a pounds 50 billion top-up to
quantitative easing, following October's shock increase.
So the further
quantitative easing is to provide further support for the economy.
The effect of
quantitative easing on exchange rates between the dollar and the floating-rate currencies is a predictable result of the Fed's plan to increase the supply of dollars.
The Federal Reserve is expected to announce a new wave of
quantitative easing measures this week.
