Fresh, New, Hot Dollars!

The Globe and Mail:

The U.S. Federal Reserve’s decision to print dollars to buy U.S. Treasuries – a measure that is designed to lower longer-term interest rates, but that might also weaken its currency – has heightened tension between leaders of the G20 countries as they prepare to begin their summit in Seoul on Thursday. Senior officials from Germany, Brazil and elsewhere have been critical of the Fed decision; some countries, fearing the new money will flood into their countries in search of higher returns, are actively trying to keep some of it out, to take the pressure off their currencies.

I doubt the American economy will perform better in 2011. The Americans have practically exhausted their monetary policy; it's fiscal policy that needs to be corrected. If the income tax cuts expire by the end of this year, then it's a certainty that the US economy will contract even more.