BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble renewed his criticism of the U.S. Federal Reserve’s move to buy $600 billion worth of government bonds, saying it undermined U.S. credibility and created uncertainty, according to a German magazine.
“I have great doubts about whether it makes sense to pump unlimited amounts of money into the markets,” Schaeuble told Der Spiegel news magazine. “There is no shortage of liquidity in the U.S. economy. I can’t see the economic argument for this move.”
The U.S. central bank’s decision to extend its program of quantitative easing raised uncertainty in the world economy, he said.
“It will make it difficult to get a reasonable balance between the industrial and emerging nations and it undermines the credibility of U.S. financial policy,” Schaeuble said.
He has repeatedly criticized the U.S. plan to buy debt and pump more money into the economy to prop it up. He also defended Germany against criticism of its trade surplus.
“The German export success is not due to any currency tricks but rather due to the improved competitiveness of German companies,” Schaeuble said. “The American growth model is stuck in a deep crisis.
“The United States has lived beyond its means for too long, its financial sector is disproportionally inflated and its industrial core neglected. There are many reasons for America’s problems ... the German export surplus is not one of them.”
Schaeuble also criticized U.S. foreign exchange policy. “It’s not right when the Americans accuse China of manipulating exchange rates and then push the dollar exchange rate lower by opening up the flood gates by turning on the printing presses,” he said.
On Friday he said U.S. monetary policy was “clueless.”
Federal Reserve Chairman Ben Bernanke has defended the move to buy $600 billion of government debt by saying that boosting the U.S. economy is important for global growth.
Writing by Erik Kirschbaum; Editing by Susan Fenton