Bernanke helicopters spilled money hangover

New York, Shanghai, May 25, Monday, the dollar continued its weakness last week, continues to fall, the euro against the dollar again rose to 1.401, reached the highest point in nearly 5 months. Since Monday (May 18), this has been the euro's sixth trading day's unilateral rally, the exchange rate has soared from 1.3494 to the present.　　Meanwhile, the pound rose from 1.53 to 1.57 last week.　　In the past week, Wall Street foreign exchange traders have experienced a short-lived "dollar Crisis". "The sentiment of the empty dollar dominates the market, and some on Wall Street are unwilling to keep the dollar, and it was their big sell-off that caused a deep fall in the dollar last week." Forex Trader Feng told our correspondent.　　Feng, a foreign exchange trader at a hedge fund in New York, is on the frontline of Wall Street, where his hedge fund is considered a "gold benchmark". The dollar's weakness is reflected not only in the euro exchange rate, but also in the US Dollar index (USDX), which has fallen in depth over the past week and has fallen through 80 points above 83 points.　　The dollar index is a key indicator of the strength of the dollar. The role of the "last refuge" of the dollar and government bonds ended in a directive that sold dollars and treasuries.　　And then the question investors have to face is whether the deep fall last week was a sign of the dollar weakening for a long time.　　Wall Street does not believe the dollar Feng personally experienced the "dollar Crisis" on Wall Street last week.　　Feng to this reporter disclosed that the U.S. dollar panic last week in the middle of the rapid spread of traders, mainly with two negative news directly related. The first was a summary of the meeting released by the Federal Reserve's open Market Committee in Tuesday. The minutes suggest that the Fed's forecasts of the US economy are more pessimistic than ever, and that the Fed believes the recession will last longer and will buy more assets. Liu Shengjun, deputy dean of the China-Europe Lujiazui Institute for International Finance, said in an interview with the US Federal Reserve that the economic outlook is very pessimistic and that the U.S. unemployment rate will reach more than 9% in the second half of the year to next. The market expects the Fed to further implement its 1.75 trillion bond purchase plan.　　The excesses of the dollar have raised fears that the Fed has injected huge amounts of basic money into the market in the early stages of the financial crisis, and that once these liquidity is released, it will have a big impact on the dollar. Another bad drop comes from standard Poole's downgrade of Britain's sovereign rating. In Thursday, Standard Poole downgraded the UK's credit Outlook rating from "stable" to "negative", meaning Britain could lose its 3 A-level sovereign credit rating. The reason for the downgrade is that Britain's fiscal deficit is rising at a rate of close to 100% per cent of GDP in 2013 and that the US has a bigger fiscal deficit than Britain. "There is concern that the U.S. sovereign rating may also be downgraded," Feng said. "Pimco, the industry's" King of Bonds ", said in an interview on the day of Thursday that the USIt is likely to lose 3 a ratings in the end.　　Gross was highly praised by Wall Street traders, and his comments were a big blow to the market. Lu, an economist at Merrill Lynch, told the newspaper: "The market is concerned about the downgrade of 3 A-level credit, and if it does, investors will certainly sell US Treasuries, which is tantamount to selling dollars."　　"A sign of a dollar decline?"　　Was this round of deep diving last week a sign that the dollar was beginning to weaken for a long time? Looking back over the past year, the dollar index hovered around 74 last July, climbing from August onwards, accelerating after the collapse of Lehman Brothers in September and hitting the 90-point mark in the wake of the most panicked financial markets in December.　　In the current financial crisis has eased, the dollar index weakened all the way, last week, the next 80 points. The dollar index rallied in the aftermath of the financial crisis, at the root because investors were extremely alarmed by market risk, and the dollar as the international reserve currency became a strong currency, and global capital bid for dollar assets to hedge against it. "Since September 2008, the world has entered the worst financial crisis since the Great Depression, and everyone has turned to the dollar because the dollar is the world's best liquid and most unlikely default," said Ben Steil, director of the International economic Department of the U.S. Foreign Relations Commission, Cranesystems.　　"Liu Shengjun pointed out that the financial crisis has come to a close, the market is no longer panic, short-term financial risk aversion, more attention is the long-term security of assets, so the long-term weakness of the dollar's concern erupted.　　Liu Shengjun points out that, although there are some accidental factors in the dollar's deep fall last week, the dollar's trend in the long run may have entered a turning point, "Mr Buffett warns of a prolonged weakening of the dollar." This means that the dollar's status as a haven has come to an end.　　Feng also believes that once the economy is stable, it is a turning point for the dollar to begin to go down. After the Federal Reserve announced purchases of $300 billion trillion in U.S. Treasury bonds earlier this year, global mainstream economists expressed concern about the long-term weakness of the dollar. The Fed has injected a huge amount of liquidity into the market with a further $1.75 trillion trillion in asset-purchase plans, combined with the huge sums invested in previous bailout plans.　　Simply put, the market is now worried that the Fed is putting in too much money and the dollar is bound to depreciate. Cranesystems to our correspondent expressed concern about the dollar, "if the Fed reacts too slowly when the economy recovers, by 2010 we will face a fall in treasury prices, a weaker dollar and rising inflation." William Poole, a senior researcher at the Cato Institute, also told the newspaper that once the economy began to recover, the Fed would not necessarily be able to raise interest rates in a timely manner in the current political environment.　　Poole was chief executive of the Saint Louis Federal Reserve in 2001-2008, and a voting member of the open Market Committee of the Fed. According to Poole, the cardAllan Meltzer, of Neckimelon University, argues that inflation in the US could end up being worse than in the 1970 (when inflation reached double digits).　　Meltzer "is probably the most authoritative person in the global study of the Fed."　　Liu Shengjun said Federal Reserve Chairman Ben Bernanke has been "in the helicopter to throw money" to deal with the economic crisis, but the problem is that the spread of money is not you want to collect it back.　　Liu Shengjun believes that the future situation may be more serious, because the liquidity of the market is difficult to estimate, the current downturn, the slow pace of currency flows, once the economy is active, the speed of money flow, now the hidden liquidity will suddenly swell up, the situation may be out of control. But Lu, an economist at Merrill Lynch, expressed a different view, "Don't think the dollar will fall to the bottom because the US has more basic currencies." "He argues that keeping the dollar strong is still important to the US, the national interest, and that the US will not allow the dollar to depreciate indefinitely, and that it will do great damage to the U.S. economy."　　China, Europe and Japan, as well as the US, are increasing the M2 supply of broad currencies. Lu points out that another reason for the dollar's deep fall last week is that many countries have been expecting better economic growth in recent years, while the good news for the U.S. economy is few.　　He sees it as a process of global asset transfer, in which investors swap dollar assets for yen assets, or in Europe and emerging market countries. A Citigroup foreign exchange trader in New York also told the newspaper that the dollar was "going down in the end" but the trend has not yet begun.　　Because other countries also have inflation, the dollar is bad, others may be worse, and the Fed is unwilling to let the dollar fall too deep. He also pointed out that the current economic recovery is not really going to need to be observed, if the recent market rally is a bearish rebound, the economy continues to decline, the dollar and U.S. Treasury bonds will rise again, but if the economy recovers completely, this is likely to be a turning point for the dollar to weaken.