* USD is a reserve currency. The benefit is obvious. The pitfall is when we think we can get away from many problems by printing more money, we're creating a bigger trap for ourselves. We may fall from a steeper cliff.
We do not have another real currency today to replace USD as a reserve currency. However, I believe the days are numbered.
* The funny thing is we blame China for manipulating the currency and China does not blame us for doing so initially. We have a long list of similar tactics like spying (all countries spy), accessing influence (we do too with foreign subsidies)... We blame China for product dumping but not for dumping rare earth elements. QE3 is a tool to manipulate the currency.
* Normally the economy is about 6 months behind the market. Market is a good predictor for the market.
Easing money usually is good for the economy as business can finance their operations at less cost. This time is different. We have printed too much and we pas the point of good return. The only advantage is we depreciate (another word for manipulate) the currency and increase inflation that reduce our debt burden like the debt from China.
We're heading to Japan's lost decades when the economy is down even with 0 interest rate.
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