The U.S. dollar's continuous southward sliding due to rock-bottom interest rates and a Himalaya like budget deficit has become a boon for U.S. exporters,particularly for those technological giants.The Federal Reserve's rate-setting committee will keep the interest rate at where it is, at least for a 4-5 months.So,the Short-term rates will remain near zero till 18th September,which would drive up the prices of oil and gasoline.
Meanwhile,the situation in Japan looks gloomy as the country is devastated by 9.0 magnitude quake and tsunami followed by a nuclear power crisis,The Monetary Authority in Japan was in hibernation for the past twenty years as they didn't do anything to end the deflation.Recently,they had taken the correct measure and by August-September 2011,they will go for another round of easing,that is moving the long-term interest rate to downwards through additional purchase of Japanese government bonds,bypassing the bank note rule.
So,from a liquidity point of view,the additional asset purchase program by the Monetary Authority in U.S. and Japan looks workable to me.
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