The continued use of a currency depends on the stability of its value and the existence of alternatives for achieving final settlement.

Longer-term yields declined by relatively large amounts on days when the FOMC made specific QE announcements. However, the objective of QE has been to reduce long-term yields beyond the levels they would have reached without QE.

The United States can simply recycle the financial capital inflows from China and re-export them back to China in the form of FDI. In so doing, the United States gains a substantially larger rate of return from FDI than China does from owning U.S. government bonds.

Weak lending may still be the culprit behind low inflation, but monetary aggregates may no longer closely track credit conditions.

Okun’s law can be a useful guide for monetary policy, but only if the natural rate of unemployment is properly measured.>

Significant store-of-value demand for housing suggests a bubble that could burst, especially when both the household income growth rate and the savings rate start to decline and capital controls in China start to relax.

We merely want to see whether, historically, fast growth of the monetary base has been associated with faster growth of real output.

Economic theory predicts that fast growth can lead to high saving rates if people lack financial institutions that allow them to borrow.

Inflation is seldom caused by lump-sum transfers but is often caused by higher government spending programs.

The important point is that both the Chinese trade surplus with the United States and the amassed foreign reserves result from the savings decisions of Chinese consumers.