Fed Global Backlash Grows
China and Russia Join Germany in Scolding; Obama Defends Move as Pro-Growth
NEW DELHI--Global controversy mounted over the Federal Reserve's decision to pump billions of dollars into the U.S. economy, with President Barack Obama defending the move as China, Russia and the euro zone added to a chorus of criticism.Mr. Obama returned fire in the growing confrontation over trade and currencies Monday in a joint news conference with Indian Prime Minister Manmohan Singh, taking the unusual step of publicly backing the Fed's decision to buy $600 billion in U.S. Treasury bonds--a move that has come under withering international criticism for weakening the U.S. dollar.
The Fed is independent, and the White House by longstanding tradition has strained to avoid any appearance of collusion or conflict. Mr. Obama said the administration doesn't comment on particular actions of the U.S. central bank, before adding: "I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole."
The prospects of the Fed flooding the financial system with money helped drive gold above $1,400 an ounce on Monday. The precious metal, which investors often buy as protection against inflation, settled at a record $1,402.80 per troy ounce. Other assets, such as U.S. stocks and oil, drifted back slightly on Monday after getting a big boost from the Fed's announcement last week. The dollar fell against the yen, while rising against the euro as worries about Europe's debt problems returned.
More from the WSJ:
Chinese Credit Rater Downgrades U.S.
Dagong Global Credit Rating Co., the Chinese rating company that was recently rejected in its bid to be an officially recognized bond rater in the U.S., just downgraded the entire U.S.The always objective Xinhua has the "scoop."
The United States has lost its double-A credit rating with Dagong Global Credit Rating Co., Ltd., the first domestic rating agency in China, due to its new round of quantitative easing policy.
Dagong Global on Tuesday downgraded the local and foreign currency long-term sovereign credit rating of the U.S. by one level to A+ from previous AA with "negative" outlook.
Der Spiegel:
Interview With German Finance Minister Schäuble
'The US Has Lived on Borrowed Money for Too Long'
SPIEGEL: Minister Schäuble, how well do you get along with your American counterpart, Treasury Secretary Timothy Geithner?
Schäuble: Mr. Geithner is an excellent minister. We have a good personal relationship.SPIEGEL: Nevertheless, he constantly criticizes government officials in countries that are achieving high export surpluses and not doing enough to stimulate their domestic economies. He's referring to you, isn't he?
Schäuble: It would appear that way. That's why I tell him again and again that I think his point of view is incorrect in this regard.
SPIEGEL: All the same, the value of goods Germany sold to the United States exceeded imports from that country by almost €14 billion ($19.8 billion) last year. Can't you understand that the American treasury secretary is concerned about this?
Schäuble: No, because since we introduced the euro in Europe, the determining factor is no longer US trade with Germany, but US trade with the totality of countries in the euro zone. And in that respect the balance of trade tends to be even. So what's the problem? After all, we don't complain about the export successes of individual American states.
Today, gasoline in Maine is $2.90, sugar has increased by 10% in the last week, and Sargento cheese by 15%.
HARBINGERS.
Commodities increasing in price during THIS situation IS inflation
1 comment:
Answer from the
Obama "Administration" we launch an intercontinental ballistic missile to demonstrate China we can do this?I fear this will not end well.
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