Thursday, August 21, 2014
Inquirer Daily News

Fed is fighting US war vs China: report

Bernanke's real goal isn't to get US banks to lend more; it's to drive down the dollar so we import less from China and sell more abroad, says bank analyst Dick Bove

Fed is fighting US war vs China: report

Reviewing Federal Reserve chairman Ben Bernanke's speech in Frankfurt today, bank analyst Richard X. Bove (currently of Rochdale Securities LLC) concludes that critics who think Bernanke is trying to inflate the US economy miss the point.

"It is a currency war," Bove wrote in a report to clients today. He says Bernanke is working hard to force a weaker dollar that will change "the trade imbalance" and make US goods cheaper, which would boost demand for US products and create jobs here.

Bernanke spent much of his talk on "a long discussion explaining how China is manipulating its currency and why this creates distortions in the global economy which ultimately hurt everyone, including teh Chinese... Bernanke will continue his policy of pressuring the Chinese by lowering the value of the dollar... It is very dangerous policy because, before the Chinese adjust, the American economy could highly inflate." 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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