U.S Dollar, the winner of the financial crisis?美元,金融危機的贏家?

摘要: 眾所周知2007年的金融危機始于美國，但它卻沒有在美國境內停止。隨著國家之間聯系的密切，此次金融危機的影響已經波及全球。發展中國家，事實上，承擔了華爾街危機多半的苦果，而美元卻在這錯綜復雜的環境中逃脫。

關鍵詞:次貸危機 負債 發展中國家

Abstract: The world knows that the financial crisis in 2007 started from United States， but it does not actually end there. The significance of the crisis has spread worldwide along with the increasing financial connections between nations. Developing countries， indeed， took more than half of the “bitter end” of this Wall Street while U.S dollars somehow found its way out of the tangled situation.

Keywords: sub-prime crisis debt developing countries

The world has not been better off since the “credit crunch” began. The “US economy has been spending too much and borrowing too much for years， the rest of the world depended on U.S consumer as a source of global demand.” With a recession in the U.S and the increased savings rate of U.S consumers， the world suffered from a dramatic decline of growth. For the first quarter of 2009， the annualized rate of decline in GDP was 14.4% in Germany， 15.2% in Japan， 7.4% in the UK， 18% in Latvia， 9.8% in the Euro area and 21.5% for Mexico.

It is clear to see how financial crisis from 2007 till now has largely affected nearly all the industries across the nations. But fewer people get to see the other side of the story. U.S dollar， the world dominant international currency has been famous for its strategic role in world trading. It also plays an implacable part in the battle of financial crisis. This paper will talk about the U.S Dollar and how the U.S debt benefits from this current global economic crisis.

The U.S sub-prime financial crisis caught the world’s attention to the American economies. Shockingly， people found that the world’s most powerful country has accumulated enormous amount to debt to other nations since 2002. According to the U.S National Debt report 2010 by Wilson and Brown， since September 30， 2005， the National Debt grew over $1.8 billion each day. This computes to $75 million per hour， $1.26 million per minute or $21，030 per second. The total of American national debt， local government debt， corporation debt， financial debt， personal debt have piled up to 53 trillion dollars. Social security fund debt was 13.6 trillion dollars， medical insurance debt was 85.6 trillion dollars. At the same time， federal employment debt was up to a new high of 102 trillion dollars. If all the civilian debt and government debt added up， the total would be a debt of 155 trillion dollars.

In 2008， this financial crisis awakened most of the world when the Wall Street investment bankings started to crash， when the bubbles floated to the air and fictitious economy began to have an impact on real economy. Economic depression，bearish market， surplus of production， commercial crisis， deflation， glooming stock market， job loss， etc seem like all come out in one night when Lehman Brothers filed for Chapter 11 bankruptcy protection.

From above we can see， American is the heart the financial crisis and also hurt the most. But if we examine this event from a different point of view， America can become the greatest beneficiary as its currency to be part of the strategic recovery plan.

The United States was the only nation that fought in WW2， which did not suffer major physical damage to its mainland and infrastructure. All the other nations involved had to rebuild considerably which left their economies in complete disarray. Some nations also paid the U.S for their assistance. In 1844， U.S Dollar was selected as the currency which gold was freely convertible at $35 per ounce. All major currencies were then pegged to the Dollar with fixed ranges of fluctuation.

In the mid of 1990s， America came up with Credit Default Swap， usually referred to CDS. This insurance-like contract， which originally aimed to protect against default on loans， has helped America to get approximately 60 trillion dollars in 2008， equals to 4.6 times of its GDP.

In other words， America has been borrowing money from the world to support its own economy， bringing the bubble to the world by printing more and more dollars and coming out with new monetary policies. The international debt of many countries that are actively trading in the global market is now a large part denominated in U.S Dollars. This is primarily due to the establishment of institutions such as the International Monetary Fund and the World Bank that arose out of the Bretton Woods conference. Basically， all debt owned to the IMF is U.S Dollars denominated. This manes that if a developing nation receives a loan from the IMF， then that loan will be in U.S Dollars and will later have to be repaid in U.S Dollars. As a consequence， any repayment of the USD denominated loan or attempt to stabilize the national currency would tend to necessitate the trading of U.S Dollars o the open market.

Usually， if a company is about to have financial crisis， it always tightens the expense to smooth the difficult time. A country should behave the same when facing upcoming financial crisis. But America did the opposite in the year 2007; it speeded up the pace of oversea lending when the financial crisis began. According to U.S Bureau of Economic Analysis (BEA)， U.S held 3.56 trillion dollar net capital from abroad， which is the highest since the 70s. Its total volume of oversea asset was a shockingly 19.46 trillion dollars. It means that during the crisis， the liquidity of the currency largely out flowed to other countries during foreign investments. So when the crisis began， Americans began to sell U.S Dollar for the fear of inflation; at the same time， other countries including developing countries still held large amount of foreign investments or U.S bonds. At the end of 2007， U.S owned the world 21.18 trillion dollars.

At this point， America achieved its great escape， left the crisis for the rest of the world. In 2007， the unfavorable balance of payment (current account balance + capital account balance) was 733.1 billion dollars (BEA gov 2008). The outstanding balance usually adds up the same amount each year， but in fact， U.S outstanding balance of payment did not increase but decreased dramatically. Compare to year 2006， it decreased 12.18 billion dollars. It means that with the “supposedly” debt in 2007， about 85.49 billion dollars just vanished off the sheet. It is even larger than the collapse of 60 billion dollars sub-prime housing bubble. This “dark matter” transfers the wealth from all over the world to U.S. The debt cannot disappear itself; at the same time， countries like China are losing their wealth greatly because the massive accumulated foreign reserve.

There are mainly three ways for the disappearing of U.S debt， this includes the national and trade deficit: first， the devaluation of U.S dollars; second， the increasing value of U.S foreign investments; third， the decreasing debt over the years. Since 2002， U.S Dollars has started its 6 year long devaluation. It hurt other countries whoever hold U.S debt from U.S Dollar’s devaluation. From 2002 to 2006， U.S has swept 3.58 trillion off its deficit balance. During 2001 to 2006， even the total current account deficit has gone up to 3.856 trillion dollars; the net debt has decreased 19.9 billion dollars， which was a net profit of 4.055 trillion dollars. Among these numbers， the devaluation of Dollar contributed 89.2 billion dollars， the change of capital price contributed 3.163 trillion dollars. Contradictorily， with the ongoing debt， the profit of net foreign investment to other countries went up year by year. It even reached 88.8 billion dollars in 2007 along with its increasing debt.

This financial crisis created a new way for America to get capital from the world to save its domestic economy. The devaluation of dollar can bring the benefit directly to its account， but it also harms the reputation of Dollar as the world key reserve currency. For long term， U.S Dollar cannot keep on devaluate， it explained the 2008 economy boost of U.S when U.S Dollar suddenly got stronger. When the financial crisis spread to the rest of world， foreign markets become insecure and unstable. So U.S investors withdrew their investments in other countries and transferred them back to U.S. All this factors pushed dollar to appreciate remarkably in the second half year of 2008.

U.S Dollar pulled America out of a worse financial situation: it changed the Current Account balance， successfully retained the U.S Dollar as the key reserve currency. Compared to U.S， it is the developing countries that actually suffered the most behind this crisis. Due to the limitation in the development of economy and finance， most of the FDI by developing countries were the purchases of Bond， specifically， the U.S bond. In this economy crisis， it is also the U.S bond that shrank the most in value. Accordingly， developing countries has lost far more than the developed countries.

Inflation and another potential financial crisis are other major problems that developing countries have to deal with. Before 2007， emerging markets attract large amount of capital from developed countries， from 2006 to 2007，this number increased unprecedentedly from 25.57 billion dollars to 62.88 billion dollars (Ding 2008). The inflow of capital overheated the economy in developing countries， and caused great inflations in more than 50 developing countries. What’s more， the great inflation showed signal of another greater “East Asian Financial Crisis. The dramatic outflow of the investments always followed by the inflow of capital. For this time， the situation would be even worse since more much bigger volume of investment is involved.

There’re two ways that could possibly change the situation. First， restrict the inflation of U.S Dollar and prevent sudden devaluation of dollar during the economic recession. It is necessary to establish a stronger currency exchange system， strengthen each country’s currency policy， and achieve the currency stability under a common regulation. Second， amend the international regulation of cross-national capital flow. The history of capital flow showed that unstable flow could very much cause a financial crisis. Under current global economic system， foreign investment inflow is more depended on external reasons. Europe was also a victim in this financial crisis; this provided good conditions for a further negotiation about some new international regulations.

This paper did not examine all the affected aspects from this financial crisis. The benefit that America gets from this financial crisis could not erase the domestic problems such as the diminishing individual finance asset， arise of unemployment rate， ect. America has a long way on its recovery from the crisis so as many other countries. As we are nearly at the end of this financial crisis， the world has entered the “currency war” period. Currency， as a nation’s financial identity and great tool， is due to undertake more roles and will be crucial to a country’s future.

Reference：

Baily， Martin Neil， and Douglas J. Elliott. The US Financial and Economic Crisis: Where Does It Stand and Where Do We Go From Here?. : Business and Public Policy， 2009.

Croft， John. Global GDP signals recovery: general aviation aircraft deliveries decline， but GAMA optimistic that increases could follow international growth， 2011.

Wilson， Charlotte G.， and Emily O. Brown. The U.S. national debt: background， issues， and significance. Hauppauge， N.Y.: Nova Science Publishers， 2010.

Monetary policy， the economy， and the budget: hearing before the Committee on the Budget， House of Representatives， One Hundred Second Congress， first session， January 22， 1991.. Washington: U.S. G.P.O， 1991.

Bach， Christopher L. “Annual Revision of the U.S International Accounts， 1974-20071.” BEA.gov report 1 (2008): 36. http://www.bea.gov/scb/pdf/2008/07%20July/0708_international.pdf

作者簡介：

（1989－），女，漢族。單位：美國紐約州雪城大學本科四年級，研究方向：金融

（責任編輯：楊輝）