WASHINGTON, Oct. 17 (Xinhua) -- The United States seems again planning to abandon the world on its track to economic recovery with the Federal Reserve's latest hints on further monetary easing policy.
At a Fed meeting Friday, Chairman Ben Bernanke implied the possibility of a second round of quantitative easing, or QE2, which is expected to take shape in November. QE2 may include purchasing Treasury bonds and printing dollar to liquidize the U.S. economy given the still fragile recovery.
Whether it can be a silver bullet to drag American out of the slump remains unknown, analysts say. Yet it seems certain that the measure is somehow self-centered and will create considerable spill-over effects in other parts of the world.
Initial effects can already be found as prices of dollar-pegged commodities like oil and gold soar, and as fear of "an international currency war" hits headlines in the wake of further Fed easing policy guess.
For countries, the developing ones in particular, excessive inflow of speculative hot money when global exchange rates change too fast will put governments on pins and needles looking for counter-measures.
The greenback has already been weakening against other currencies such as the Japanese yen, the Australian dollar, the Singapore dollar and the Thai baht, affecting their exports.
Japan intervened in the forex market for the first time since 2004, as the yen hit a 15-year high against the U.S. dollar last Friday. Brazil also put in place a flurry of measures to limit the gains in its exchange rate for fear of a currency war as advanced countries seek to devalue their currencies.
"'Currency war' might be too strong, but the fact the countries want to find domestic solutions to a global problem is really a threat to the recovery," said International Monetary Fund (IMF) chief Dominique Strauss-Kahn.
Experts assigning blame to Fed's loosening monetary policy include Nobel economics laureate Joseph Stiglitz who said this caused foreign exchange "chaos" over the rest of the world.
Stanley Fischer, Bank of Israel governor and former IMF deputy managing director, said that the developing economies are coping with a crisis triggered by others.
In the mean time, U.S. creditor countries may face the danger of shrinking foreign exchange reserves after Fed's further loosening policy, which harms global market at large.
Creative as it is, quantitative easing policy lacks concrete theoretical support. Many hold that a continuation of such policy will not necessarily boost recovery, if not bringing troubles.
The Fed, regarded as the world's most important central bank, should shoulder the foremost responsibility in leading the world out of darkness. But are we seeing it seeking to benefit itself at others' expense?
Just as the saying goes: Live and let live.