Summarized article Example | Topics and Well Written Essays - 500 words - 1

Summarized - Article Example These events are mentioned by the author as an anecdotal introduction to understanding the potential changes in international finance in the near future. This paper will offer a summary of the article highlighting the main ideas presented by the author (Forsyth). The author of this article describes how quantitative bond easing is likely to affect the interest rates in different regions. The author mentions the outstanding roles of the federal reserves in creating a balance of situations and eliminating concerns on the fear gauge. China, for example, has declared a lowered bank reserve requirement while the bank of England will follow suit soon. This will happen after America announces its trimming of monthly purchases of bonds. The author places emphasis on the critical role held by the US in the global financial scene. This is specifically because of the dollar, which has been used as a reserve for global currencies since the 1920s. In the past, there has been evidence that the US makes use of its â€Å"exorbitant† privileges and eventually exploits other nations. This is because the dollar still remains the center of global currency. It is both a reserve in store houses that serve other central banks and the primary currency used i n finance and trade internationally (Forsyth). The globe also relies on the dollar as the effective media when indulging I transactions and investments. The dollar has also been described as having made America’s banking and financial system very liquid and deep. Therefore, since only the US can produce the much needed dollars that control the global finances, it enjoys an exorbitant privilege. As the author outlines, there are the implications of such a privilege. An evident one is the fact that, the US can print dollars and use such in exchange for goods produced in other regions. The US can also indulge in cheap borrowing because borrowing is done in the currency it produces. Other