"I have great doubts about whether
it makes sense to pump unlimited
amounts of money into the markets"
(No Votes: Entire Globe, Yes Votes: Paul Krugman)
By Erik Kirschbaum
(Reuters) - German Economy Minister Rainer Bruederle said on Sunday he was worried about the U.S. Federal Reserve's move to buy $600 billion worth of government bonds, saying it would lead to a devaluation of the dollar.
Adding to recent criticism from Finance Minister Wolfgang Schaeuble, Bruederle was quoted in the Welt am Sonntag newspaper saying: "The expansive U.S. monetary policy worries me because an excessive monetary expansion is also an indirect manipulation of the dollar's exchange rate."
Bruederle added: "It will lead to a devaluation of the currency...protectionism is not going to help us on the route to having a stable worldwide economy."
Bruederle said: "Obviously it's desirable that U.S. economic growth picks up. But I doubt that the economy will be helped on its own by the Fed injecting more money into the economy."
On Saturday, Schaeuble told Der Spiegel magazine the Fed's move undermined U.S. credibility and created uncertainty.
"I have great doubts about whether it makes sense to pump unlimited amounts of money into the markets," Schaeuble said. "There is no shortage of liquidity in the U.S. economy. I can't see the economic argument for this move."
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.