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Economists describe Bernanke’s strategy as a way of putting the country’s massive debt burden on every other country’s shoulders by systematic dollar devaluation.

November 20, 2010 (Hamsayeh.Net) - US Federal Reserve chairman Ben Bernanke has once again defended his strategy of injecting unsupported money into the moribund economy saying without any such a program in place unemployment and foreclosures could persist for years. 

Fed’s last week QE2 announcement drew widespread condemnations across the globe. Economists describe Bernanke’s strategy as a way of putting the country’s massive debt burden on every other country’s shoulders by systematic dollar devaluation. A devalued dollar will greatly reduce China’s massive dollar holdings making it totally worthless in the not too distant future and it would also pay for much-needed oil imports with the money printed out of thin air. 

The Obama administration officials are thinking that since the US dollar has established itself as world’s most major trading currency, other nations would have to accept to live with Fed chairman's decisions. But, in a surprise move China, the biggest holder of US treasury bills, warned US to end its money printing practices, as it would damage the already fragile global economy.

In US, Alan Raynolds, a leading economist said the idea of boosting the economy through QE2 and inflationary measures is just a dream. ‘Rising commodity prices and a debased dollar have proved harmful to many businesses because inflated costs mean deflated profit margins,’ he said.

Other analysts say that the time has come for the United States to stop seeing himself like a superman whenever standing in front of a mirror. In reality this heavily oil-dependent North American country is history’s most indebted nation which has become critically de-industrialized due to phenomenal economic growth in the East.

US Federal Reserve chairman defended his inflationary monetary policies.