Germany Says Fed Is Headed ‘Wrong Way’ With Monetary Easing

Discussion in 'Wall St. News' started by ASusilovic, Oct 24, 2010.

  1. Oct. 24 (Bloomberg) -- 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, 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 bank’s efforts to jumpstart the world’s largest economy. His strategy, which investors expect will soon include greater asset purchases, drew criticism at the talks, said Bruederle.

    “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. 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.

    The debate over the Fed’s strategy comes as the G-20’s advanced nations sought to alleviate concerns over big swings in capital flows to emerging markets by promising to be “vigilant against excess volatility” 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.’s co-founder and manager of the world’s 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.

    ‘Indirect Manipulation’

    “Excessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate,” Bruederle said.
  2. "Excessive" and "permanent" are the key words here. What is excessive for a $15 trillion economy, and should QE2 continued for one year, is that permanent?

    Does Bruederle look like Merkel, or do all German politicians look alike?
  3. That´s more of rhetoric question, or ? :confused:

    Goldman S&P 500 Earnings

    Our top-down EPS forecasts of $81 and $89 for
    2010 and 2011 reflect +43% and +10% growth,
    respectively. Our pre-provision and write-down
    EPS forecasts are $85 for 2010 and $89 for 2011.
    Bottom-up consensus forecasts a 47% increase in
    2010 to $83, and a 14% increase in 2011 to $95.

    So, QE II is needed to boost +43 % earnings growth to +143 % earnings growth or what ?

    And I don´t know what Apple is planing with its $25.8 billion in cash holdings ( that actually might be $ 50 billion ).

    Ramping up its own stock maybe ?
  4. piezoe


    With 25 billion in cash Apple could easily leverage that up to 100 Billion and fund their own war for about a year in the the hapless third world country of their choosing.
  5. Did that dude pinch that woman's fanny? :confused: :eek: :D
  6. And normal folks say there is no currency war :D :p