Is the US dollar depreciation policy helping to pay down the 14.5 trillion USD national debt more quickly?

Answers:0   |   LastUpdateAt:2012-09-20 14:03:02  

Question
- Uh. attachment -
Asked at 2012-09-20 14:03:02
I am looking for information on current dollar depreciation (depreciation against devaluation, since we are a freely floating market traded against other world currencies). MedlinePlus MedlinePlus My understanding is that depreciation occurs indirectly through inflation. MedlinePlus MedlinePlus This is mainly because: MedlinePlus MedlinePlus The Fed is effectively printing money through the press and was engaged in laying QE2 bought Treasury bonds (notes) on the open market and made more money supply in the system. MedlinePlus MedlinePlus All the new currency in the system actually depreciates the dollar against other world currencies like the euro, sterling and yen, but not as the RMB RMB is for all intensive purposes linked to the dollar within a band of 5% fluctuation. MedlinePlus MedlinePlus The consequences of this action should result in improved U.S. export company as American products more competitive, and sales abroad in Euro / Yen / Sterling are repatriated to the U.S.. In short, people believe that this will stimulate the economy through improved aggregate demand and improve employment growth rates, etc. .. MedlinePlus MedlinePlus MedlinePlus But in terms of our national debt USD 14.5 trillion, is this policy of currency depreciation actually improving our current level of notional debt? MedlinePlus MedlinePlus Thinking about it: MedlinePlus MedlinePlus 1. U.S. Inflation household must make the negative real rate of return FEDS reducing the interest payment obligation in Treasuries. Although, I think a large part of the treasury of IOU have inflation adjustment mechanisms built into their rates now? MedlinePlus MedlinePlus 2. QE2 policy of buying Treasury bonds on the open market pay for existing debt faster. MedlinePlus MedlinePlus MedlinePlus Are we using the highest value of the foreign currency to pay the debt at a faster pace? All currency units now has more purchasing power against the existing dollar-denominated debt? MedlinePlus MedlinePlus I also realize that foreign holders of our debt are not exactly happy with the situation. For example, if the British government had $ 100 million in bonds the U.S. Treasury is now worth about 60 billion pounds sterling at maturity using current rates of currency conversion instead of 75 million last year. In other words, if the Fed withdraws this debt today must be a benefit to pay in foreign currency? MedlinePlus On the other hand the Chinese as one of our biggest creditors should not be as unhappy as their currency was fixed so literally I'm not convinced that the policy of dollar depreciation is affecting them more than to add to its existing inflation concerns ...
Answers

This Question:"Is the US dollar depreciation policy helping to pay down the 14.5 trillion USD national debt more quickly?" No answers yet. Be the first!
Related Questions
1
  • Answer This Question:Is the US dollar depreciation policy helping to pay down the 14.5 trillion USD national debt more quickly?