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.And Bruederle is 100% right, even though he's too soft. Any money creation is a manipulation of exchange rates. Nothing less.
“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.
“Excessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate,” Bruederle said. The minister has taken a pro-market stance in his first year in office, criticizing state intervention in cases such as providing aid for General Motors Co.’s German Opel unit.
U.S. Treasury Secretary Timothy F. Geithner dismissed prospects of mounting criticism of the Fed’s approach in his press conference after the G-20 meeting yesterday. When asked whether he expected Germany’s criticisms to gain steam, he replied: “I do not.”Given that Geithner is always wrong and hence is a compass pointing to the south pole, you can be 100% sure that Germany's criticisms will gain steam. And this is a good thing.
“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.Which recovery again?