A: After World War II, 1944 convened the Bretton Woods Conference, signed the General Agreement on Tariffs and Trade, and established the IMF. * * * Coupled with the Bretton Woods system, the dollar was pegged to gold, and the gold standard began to collapse. Because after World War II, the European economy, as the main battlefield, plummeted, and China in East Asia experienced more than a hundred years of war, and its economy was facing the situation of collapse. Compared with Asia and Europe, the United States, which is far away from North America, is the only country not affected by the war, and because President Roosevelt implemented the New Deal during World War II, he put the financial power under the control of the central government. Therefore, the capital accumulation in the United States is extremely rich, so the United States is the country with the richest gold reserves and the most stable monetary policy in the world after the war. The dollar is also the most powerful to become a common currency. 197 1 year, under the pressure that the persistent fiscal and trade deficits will empty the US gold reserves, US President Nixon gave up the dollar-gold peg (1 ounce of gold = $35). Since then, the dollar has become a non-cash banknote without any national financial and monetary discipline. At the Bretton Woods Conference held at the end of World War II, the dollar, a reliable currency supported by gold, was established as the benchmark currency for international trade financing, and the currencies of other countries were pegged to the dollar at a fixed exchange rate that rarely changed. The goal of the fixed exchange rate system is to maintain the integrity of trading countries and prevent them from falling into a long-term trade deficit. People didn't expect it to dominate the living standards of trading countries, because the latter is measured by many other factors besides the exchange rate. It is precisely for this reason that the Bretton Woods system formed under the traditional wisdom of international economists did not take into account the transnational capital flows needed for world trade financing. From 197 1, the dollar has changed from a gold-backed currency to a global reserve currency instrument that only the United States can issue at will. At the same time, the United States continues to suffer from current account deficits and fiscal deficits. This is the beginning of dollar hegemony. Dollar hegemony is essentially a geopolitical phenomenon, that is, as a non-cash dollar, it plays the role of primary reserve currency in the international financial system. Specifically, from 197 1, the reserve currency status of the US dollar was not based on gold, but only on the geopolitical strength of the United States, which forced all key commodities to be priced in US dollars.

Of course, today, the trend of economic multipolarization is becoming more and more obvious, and the status of the US dollar has been impacted. The main aspect is the instability of domestic monetary policy, and a large number of national debts are in the hands of big countries such as China. The second is the impact of the euro. Speaking with one voice, the EU is a political and economic union composed of developed countries all over the world, with very huge economic strength. It is the main force that impacts the dollar.

Question 2: The impact of quantitative easing policy in the United States on China.

A: Quantitative easing is a monetary policy. The improvement of money supply by the central bank through open market operation can be regarded as "creating a certain amount of money out of nothing" or simplified as printing more money. By printing more money to increase liquidity, we hope to stimulate the economy and accelerate the pace of recovery. Once the excess dollar is created by the monetary authorities, it will not disappear out of thin air and will inevitably flow to all fields of economy and society. According to the degree and characteristics of participating in the generalized production process, the economic system is subdivided into real economy, virtual economy and financial system, so there are at least three flows of generalized money: to the real economy, to the virtual economy and to stay in financial institutions. In addition, as an international standard currency, the US dollar can easily flow to the international market.

From the above, it is easy to know the four flows of the US dollar (including other currencies that can circulate in the international market) and their respective influences.

First, it flows to the real economy. In this case, money participates in the exchange of real products and services, which reduces the transaction cost of social products and services in production, exchange, circulation and consumption, and promotes the growth of the real economy by causing the rise of the general price level and money illusion. The fundamental purpose of the Federal Reserve's quantitative easing policy is to hope that money can flow to the real economy and promote its development. When excess money flows into the real economy, general price levels such as consumer price (CPI) and GDP deflator will rise, that is, inflation.

The second is to flow to the virtual economy. The strengthening of financial deepening will inevitably lead to the improvement of economic virtualization level. At present, the nominal value of global financial assets representing the scale of virtual economy has long been far from the global GDP, with financial derivatives alone exceeding 600 trillion US dollars. Compared with the real economy, excess money often flows into the virtual economy represented by financial market and asset market (such as stock market and housing market) to obtain greater benefits. When a large amount of capital flows into financial markets and asset markets, the prices of financial products and capital products will swell.

Third, the internal circulation of the financial system. In the case of the financial crisis, economic subjects are pessimistic about the prospects, which leads to the shrinking of the credit creation mechanism in the economy and society, and a large amount of funds cannot be lent. The amount of funds flowing to the real economy and the virtual economy is very small, and the banking system has to deposit funds in the form of excess reserves. This is more obvious in the United States. After the financial crisis broke out in September 2008, the base money in the United States doubled in a short time, but at the same time, the excess reserves of banking institutions also increased by the same amount, and the cash in circulation did not change much. This has not changed, even though the American economy has recovered for five consecutive quarters today. = = Produced by Beiyouwa ~