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Home Publications Blogs Beat the Press QE2 Will Lower the Value of the Dollar

QE2 Will Lower the Value of the Dollar

Sunday, 09 January 2011 08:00
The NYT reported that conservatives criticize the Fed's new round of quantitative easing (QE2) for, "printing money, financing the federal deficit and devaluing the dollar." The devaluing of the dollar is in fact one of the main goals of QE2, not an unfortunate outcome as the piece later notes. One of the ways in which QE2 would boost the economy is by making U.S. goods more competitive internationally by lowering the value of the dollar.
Comments (5)Add Comment
well, yes
written by ethantered, January 09, 2011 3:59
Is this beat the press, or beat the conservatives? Seems to me the report is right -- conservatives do complain that QE2 will lower the value of the dollar.
Not by much
written by PeakVT, January 10, 2011 9:32
QE2 Will Lower the Value of the Dollar

It's not going to do much in this regard. We need QE3 and 4 and 5 and so on until the mercantilists squeal.
written by Markn, January 10, 2011 7:50
how'd that work out for the Japanese? They've been QEing for a decade or more now and if QE has lowered the value of the Yen it has done so only relative to where one would have to imagine it would be in the absence of QE.

I think the Fed is going to have to try harder.

written by Mike B), January 11, 2011 5:00
It's more like the Titanic 2 for Social Security recipients for the USD to fall. What a great, ready made way to do what the billionaires want: cut Social Security by making the dollar worth less and boost export capacity to gain market share. Brilliant!
Dollar value falling
written by Value of the dollar, January 19, 2011 2:26
Quantitative easing in US most certainly will increase political pressures on the Fed. Given the breathtaking manner in which they have departed from their original mission to promote price stability, and the morally dubious effort to "rescue" the economy at the expense of savers and retirees, opprobrium is not only to be expected, but, in my opinion, deserved.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.