Schauble on QE2

http://www.futureofcapitalism.com/2010/11/schauble-on-qe2

The finance minister of Germany, Wolfgang Schauble, has an interview with Spiegel:

SPIEGEL: Last week, the US Federal Reserve Bank decided to flood the economy with $600 billion in new money. Will this stimulate the economy as hoped?

Schäuble: I seriously doubt that it makes sense to pump unlimited amounts of money into the markets. There is no lack of liquidity in the US economy, which is why I don't recognize the economic argument behind this measure.

SPIEGEL: The US wants to depress the value of the dollar in this way, so that it can sell its products abroad more easily. In light of the ailing US economy, isn't that a completely reasonable strategy?

Schäuble: No. The Fed's decisions bring more uncertainty to the global economy. They make it more difficult to achieve a reasonable balance between industrialized and emerging economies, and they undermine the US's credibility when it comes to fiscal policy. It's inconsistent for the Americans to accuse the Chinese of manipulating exchange rates and then to artificially depress the dollar exchange rate by printing money.

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by Editor  |  Nov 8, 2010 at 10:48 am Related Topics:  China, Europe, Federal Reserve receive the latest by email: subscribe to the free futureofcapitalism.com mailing list