Wow. The Ben Bernanke actually standing up to international pressure.

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The Federal Reserve isn’t going to fall on its sword to save the world economy, Ben Bernanke said Friday. The Fed is not going to raise interest rates or tighten U.S. monetary policy prematurely just to satisfy the demands of emerging markets, he said in a speech in Paris ahead of this weekend’s meetings of the Group of 20 finance ministers.

If emerging markets have a problem with too much capital flowing into their economies, they should fight back with their own monetary policies, rather than demand that the Fed do their dirty work, he said. Read our full story on Bernanke’s speech.

Many critics argue that the Fed’s easy money policies are having bad unintended consequences in emerging markets. They say that all those dollars being created by the Fed are flowing into commodity markets and emerging markets, creating inflation, currency imbalances and asset bubbles. They insist that the Fed stop trying to reinflate the U.S. economy.

Bernanke’s response: The Fed is doing what it thinks is best for the U.S. economy. If China, or India, or Egypt have a problem with that, it’s up to their authorities to recalibrate their own policies. It’d be really good, for instance, if China would allow its currency to appreciate.

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http://www.marketwatch.com/story/fed-wont-fall-on-its-sword-bernanke-says-2011-02-18?reflink=MW_news_stmp

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1. Wow. That's a backspin worthy of Ilie Nastase. The US is presently "the sick man" in the world

economy, and we're more in need of saving (read, reverse FDI) than the other way around.

What's really made the US economy sick is disinvestment by global banks and U.S.-based multinationals, and the cash hoarding (>$1.3 trillion) and offshoring of those same very cheap funds the Fed has created. Instead of domestic hiring, however, the pattern has generally been that MNCs continue to expand offshore operations and hiring. The overheating of forign markets is largely due to the flight of U.S. capital. The big US-based multinationals haven't even begun to repair the damage they did to the U.S. jobs base. According to the Commerce Dept, during the recession, MNCs laid off at a rate twice that of domestic corporations.

Overall, Bernanke's policies have contributed to the U.S. debt, disinvestment and unemployment. He is hardly "standing up to international pressure", and has instead been a windfall to global banks and multinationals.

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2. You claim us needs FDI (help from foreign investors).

yet at the same time acnolwedge that US corporations have record cash and ability to finance expansions via very cheap money.

It can't be both.

"Instead of domestic hiring, however, the pattern has generally been that MNCs continue to expand offshore operations and hiring."
US payroll is expanding. It expanded by roughly 2 million net jobs since the bottom and continues to expand. The private sector actually produced more jobs than that because we have a net contraction of public sector jobs (ill advised but done anyways).

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3. "Reverse FDI" is reinvestment of funds by MNCs. MNCs are global entitities with HQs of convenience

in the US. So, see, they can be both. Look it up.

We lost 8.7-11 million jobs, depending on how it's counted, so we're only a couple steps up from the bottom, and have a long way to get back to Dec. '07 levels. And, by the way, net disinvestment by MNCs have been going on for years, so that may not be an adequate base-line. Rising underemployment and declining middle-class income losses due to a lack of domestic investment are long-term systemic problems; the Fed has encouraged offshoring, and continues to do so.

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4. How has the Fed encouraged offshoring?

They haven't. Fed policies neither encourage nor discourage offshoring.

If anything a weakened dollar makes US products cheaper internationally, and makes foreign products (and products made by US companies overseas) more expensive.

One can argue US trade policy is "broken" in that is provides insufficient reason to chose US employment over foreign employment but that isn't the domain of the Fed and is something they have no control over.