The Shortcomings of Quantitative Easing in Europe
Currency-exchange rates become the main thing that affects the real economy when interest rates already are essentially nil. And the yen weakened sharply, by nearly 2%, to over 121 to the dollar from under 119.
Part of that represents Chinese corporations’ rush to repay foreign-currency debt that would increase in real terms if the yuan declines. Part also represents acquisitions of foreign assets, such as the recent purchase of the appliance business of General Electric (ticker: GE) by Haier 1169.HK in Your Value Your Change Short position (1169.Hong Kong).
But the winners in Iowa and New Hampshire aren’t likely to take kindly to what they see as currency manipulation that hurts U.S. workers. And they’re apt to be rather stubborn about it.