QE2 Deployed: America's $600bn Stimulus Package and Impact on EM Currencies

Fed CHAIRMAN Ben Bernanke (undergrad Harvard, PhD Economics from MIT) has said the US' $600bn stimulus package will not spur inflation. Will it lead to inflation? Could speculative bubbles appear in bonds and commodities? South Africa's finance minister Pravin Gordhan said the US should pay more mind to the impact of QE2 on other nations. The stimulus will take the form of the government buying (government) bonds in a bid to make loans cheaper and encourage Americans to spend more. The impact on emerging market currencies was for them to strengthen versus the dollar, provoking foreign countries to intervene in the currency markets to maintain export competitiveness.