But the success or failure of the Fed's strategy could depend on something outside Mr. Bernanke's immediate control: foreign confidence in the American dollar and foreign willingness to keep financing the United States' huge external debt.
Napolitano said there was no evidence that Brazil would have become a communist dictatorship, while the final years of the military regime saw hyperinflation, a huge external debt, and rising violence as the country's cities grew.
Third, by obtaining U.S.-backed credit lines along with access to international banks and monetary funds to facilitate the renegotiation or cancellation of its huge external debt of close to $30 billion, as recently reported by the Paris Club of creditors.
This, among other things, has militated against the need to contract huge external debts from the core states and the Bretton Woods institutions the International Monetary Fund(IMF) and the World Bank.
Also, like Botswana, the country avoided the need for huge external debts from the advanced development capitalist states, and thefore IMF's "structural adjustment programs" by prudently managing its financial and economic resources.
This has allowed me to lead the processes of change, change needed to address a long-standing environment characterized by awesome challenges: a collapsed economy, huge domestic and external debt arrears, dysfunctional institutions, destroyed infrastructure, poor regional and international relationships, and social capital destroyed by the scourge of war.
But in government, Lula has been cautious and conservative, going even further than the IMF demanded and sacrificing social reform to repay huge external and internal debts.
We currently have a serious domestic funding problem and huge build up of external debt, which I think are the major headwinds for invesment recovery.
Under-investment in basic health and social services, the effects of armed conflict, the crushing burden of external debt, the huge systemic obstacles in the way of achieving major progress in reducing child mortality, such as continuing gender discrimination and violence and declining trust in political structures - all are having profoundly negative effects on the well-being of children.
Thus a fall in the dollar boosts America's net wealth.It may be tempting to conclude that America can comfortably continue to run huge deficits and let a falling dollar erode the real value of its external debt.
The end result was a massive decline in productivity relative to our trading partners (it stood at 70percentt of average EU productivity in 2009), and a huge increase in the budget and trade deficits funded mainly by unprecedented increases in internal and eventually in external debt (when Greece was accepted into the Euro).
