Other Nations Not Pleased With Fed Bond-Buying : The Two-Way Countries around the world are criticizing the Federal Reserve's decision to buy $600 billion in U.S. bonds. The move will make the dollar cheaper and exporting countries fear cheaper American goods.
NPR logo Others Not So Pleased With Quantitative Reasoning

Others Not So Pleased With Quantitative Reasoning

The Federal Reserve's plan to inject more cash into the economy isn't proving popular with our trade partners. Alex Wong/Getty Images North America hide caption

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Alex Wong/Getty Images North America

Quantitative easing is raising hackles across the globe. Russia, China and European countries are accusing the Federal Reserve of purposely lowering the value of the dollar by buying $600 billion in U.S. Treasury bonds. The critiques are coming ahead of the G-20 meeting in Seoul that begins tomorrow. Especially critical are countries that rely on exports, like China and Germany, as a cheaper dollar will make American exports cheaper, and theirs more expensive.

The Wall Street Journal has a nice piece on the whole thing, but the quote that leaped out at me was this from the German Finance Minister Wolfgang Schäuble:

It doesn't add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank's printing presses, artificially lower the value of the dollar.

Germany's trade surplus shot up to more than $23 billion in September. A fact that doesn't seem to have escaped President Obama.

In his first public comments since Mr. Schäuble's outburst, Mr. Obama seemed set to keep the heat on both Germany and China. "We can't continue to sustain a situation in which some countries are maintaining massive [trade] surpluses, others massive deficits, and there never is the kind of adjustments with respect to currency that would lead to a more balanced growth pattern."

Boy, that G-20 meeting sounds like it will be so much fun! Watch the body language at the post meeting photo op, the tension between the various world leaders can often be palpable.