Oct. 24 (Bloomberg) -- The Federal Reserveâs push toward easier monetary policy is the âwrong wayâ to stimulate growth and may amount to a manipulation of the dollar, German Economy Minister Rainer Bruederle said.
Fed Chairman Ben S. Bernanke yesterday gave Group of 20 finance ministers and central bankers meeting in Gyeongju, South Korea an overview of the U.S. central bankâs efforts to jumpstart the worldâs largest economy. His strategy, which investors expect will soon include greater asset purchases, drew criticism at the talks, said Bruederle.
âItâs the wrong way to try to prevent or solve problems by adding more liquidity,â Bruederle told reporters yesterday, saying that emerging-market officials were among the critics. Bruederle, a member of the Free Democratic Party, the junior partner in Chancellor Angela Merkelâs government, stepped in for hospitalized Finance Minister Wolfgang Schaeuble at the meeting.
The debate over the Fedâs strategy comes as the G-20âs advanced nations sought to alleviate concerns over big swings in capital flows to emerging markets by promising to be âvigilant against excess volatilityâ in exchange rates. The U.S. central bank completed purchases of about $1.7 trillion of debt in March to support the recovery. The policy-setting Federal Open Market Committee next meets Nov. 2-3.
Bill Gross, Pacific Investment Management Co.âs co-founder and manager of the worldâs biggest mutual fund, said Oct. 8 on Bloomberg TV the central bank may buy about $100 billion in government debt a month, or $1.2 trillion over the next year.
âIndirect Manipulationâ
âExcessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate,â Bruederle said.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aAG7BhwrfMz8&pos=5
Fed Chairman Ben S. Bernanke yesterday gave Group of 20 finance ministers and central bankers meeting in Gyeongju, South Korea an overview of the U.S. central bankâs efforts to jumpstart the worldâs largest economy. His strategy, which investors expect will soon include greater asset purchases, drew criticism at the talks, said Bruederle.
âItâs the wrong way to try to prevent or solve problems by adding more liquidity,â Bruederle told reporters yesterday, saying that emerging-market officials were among the critics. Bruederle, a member of the Free Democratic Party, the junior partner in Chancellor Angela Merkelâs government, stepped in for hospitalized Finance Minister Wolfgang Schaeuble at the meeting.
The debate over the Fedâs strategy comes as the G-20âs advanced nations sought to alleviate concerns over big swings in capital flows to emerging markets by promising to be âvigilant against excess volatilityâ in exchange rates. The U.S. central bank completed purchases of about $1.7 trillion of debt in March to support the recovery. The policy-setting Federal Open Market Committee next meets Nov. 2-3.
Bill Gross, Pacific Investment Management Co.âs co-founder and manager of the worldâs biggest mutual fund, said Oct. 8 on Bloomberg TV the central bank may buy about $100 billion in government debt a month, or $1.2 trillion over the next year.
âIndirect Manipulationâ
âExcessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate,â Bruederle said.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aAG7BhwrfMz8&pos=5
