Since our elected officials appear unable to come up with a rebuild America jobs program for fear that this would entail relieving the rich of their layabout loot, thereby further spooking capital markets, it has fallen to the unelected Federal Reserve to do what it can--mostly, from what I can tell, by providing tax payer guarantees to and putting ever more money into the hands of those same proven misallocators of capital responsible for the financial crisis and all its attendant joys.
The Fed's Quantitative Easing 2 involves a second mass printing (or digital equivalent thereof) of $600 billion dollars. QE 1 was $2 trillion. While just the prospect of the Fed action is already causing movement in the bond markets, a recent Bloomberg poll indicates 75% of those surveyed believe the Fed action will have little or no effect on unemployment. There are other concerns. One is the Yellow Horde effect.
There are fears that QE 2 will precipitate an international currency war as other countries, particularly China will take measures to keep their currencies low relative to the QE2-devalued dollar and thus keep their exports competitively priced.
But wait, there's more. China it appears has crazy bankers too, you'll be glad to learn.
Li Ruogu, chairman of the Import-Export Bank of China, had what I thought was a rather novel way of expressing China’s dependence on trade and why the rest of the world should accommodate China. According to an article in Wednesday’s South China Morning Post:
The head of a government bank on Wednesday rejected suggestions the yuan is undervalued. He said a rapid rise in the yuan would cause massive job losses and Western nations would have to be ready to accept millions of Chinese immigrants.
"If you are not ready, then please don’t pressure China to appreciate its currency, because it cannot solve the issues faced by the West," said Li Ruogu, chairman of the Import-Export Bank of China, speaking at a conference in Beijing.
Employers will no longer be burdened with the inconvenience of sending our jobs to China. Ever obliging, China will send their workers to the jobs. What jobs, you might ask? Good question.