Speaking truth to Empire, at the G-20 meetings, German Economic Minister Rainer Bruederle said that the Federal Reserve’s push toward easier monetary policy is the “wrong way” to stimulate growth and may amount to a manipulation of the dollar,
“It’s the wrong way to try to prevent or solve problems by adding more liquidity,” Bruederle told reporters yesterday, saying that emerging-market officials were among the critics. “Excessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate,” he said.We argued the same point, Friday.
Bruederle, a member of the Free Democratic Party, the junior partner in Chancellor Angela Merkel’s government, stepped in for hospitalized Finance Minister Wolfgang Schaeuble at the meeting. Thus, this should be taken as a German view, not simply that of Bruederle. It would be hard to believe that he would be stepping out on such a topic on his own.
The German's have experienced hyper-inflation and understand the damage it can do. They are one of the few sources of economic reason, in a world that for the most part believes that money printing is a painless solution to irresponsible government spending.
As for Geithner, he turned a cold shoulder to Germany's objections to QE2. When asked whether he expected Germany’s criticisms to gain steam, he replied: “I do not.”
“We are going to continue to try to strengthen the recovery under way so we can dig out of this as quickly as we can,” Geithner said.
No comments:
Post a Comment