China, Germany Criticize U.S. Quantitative Easing

China and Germany, the world's second-largest and fourth-largest economies respectively, expressed concern about Federal Reserve plans to pump $600 billion into the U.S. economy.

The Fed announced plans to buy $600 billion of assets earlier this week. The Fed hopes that the move, known as quantitative easing, will help boost the U.S. economy and lower unemployment.

German Finance Minister Wolfgang Schaeuble said quantitative easing would not solve the problems in the U.S. economy, but would create "extra problems for the world," BBC News said.

China's Central Bank chief Zhou Xiaochuan said the U.S. should focus on "reforming the international currency system."

Quantitative easing could lead to a weaker dollar, which would make U.S. goods more competitive against those of major global exporters such as China and Germany.

"If the domestic policy is optimal policy for the United States alone, but at the same time it is not an optimal policy for he world, it may bring a lot of negative impact to the world," Zhou said.

The U.S. and China have been at loggerheads for months over the value of China's yuan currency. The U.S. says that China should let the yuan strengthen more.


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sinminrah

China's Central Bank chief Zhou Xiaochuan criticizes the US's quantitative easing as bad because while it's good for the US it's not good for the rest of the world??? Now isn't that the pot calling the kettle black. China has undervalued it's currency by more than 20% by some estimates for years. The effect is good for China because it boosts its exports and bad for other countries because it costs them jobs. China better take the log out of its own eye before it tries to take the speck out of other countries eyes. Actually, you could argue that quantitative easing is a way of rebalancing the unbalanced currency exchange rate that China has created by the games that its played to keep its currency unrealistically undervalued.

November 05 2010 at 3:17 PM Report abuse +2 rate up rate down Reply
johnskii

Everyone gets it excepts the DOLTS in Washington. Shame on you people who voted your Democrat or Republican Representative/Senator Incumbent back to Washington.

November 05 2010 at 12:15 PM Report abuse +2 rate up rate down Reply
scottee

The Fed needs to be audited and then ended...but first they have to put the dollar back on the gold standard to stop this economic free for all!

November 05 2010 at 11:19 AM Report abuse rate up rate down Reply
jkennedy806

First China floods this country with government subsidized items that are in some cases, toxic, unsafe, and poorly made by labor/employees paid little more than slave wages. Second, Germany is a protectionist government. Why does the American dolloar have to take the hit. What the government should do is overhaul illegal immigration of people and foregin things/items coming into this country. How is it, that every country in the world has protection arond it's borders and it's GDP, but the US. I agree, sfamily - WE NEED THOSE SOCIAL PROGRAMS

November 05 2010 at 10:10 AM Report abuse +1 rate up rate down Reply
sfamilyent

It is hard for me to take criticism from countries that have export based protectionist economic policies very seriously. While I happen to agree that QE2 is not a good move, my present position is that we should impose some reciprocal trade actions that would effectively increase the cost of goods from Germany and China and encourage the production of those goods within our borders - a "fair" trade action, where their restriction of access to their markets causes a direct reciprocal restriction of our market to them. In addition, we'd have to impose tariffs and duties to offset the cost benefits their businesses realize from government subsidies to domestic business operations... You know, those social programs that we don't have.

November 05 2010 at 9:50 AM Report abuse rate up rate down Reply
adofilli

The nationality of the people making descisions with our money(Dollar) should be changed, as an example,they were ran out of the temple in Christ time!

November 05 2010 at 9:37 AM Report abuse +1 rate up rate down Reply
erink91321

This " Quantitative Easing " Will also create More Inflation than the Common Consumer can afford. The Best thing to do with this Worthless money is for the Government to use it to pay their way and Not send it out into the General Circulation for Banks to loan. That is the Only way it will work without destroying the Buying Power of the Common Consumer

November 05 2010 at 8:47 AM Report abuse rate up rate down Reply
2 replies to erink91321's comment
scottee

our buying power is very close to being destroyed already. the fed keeps printing and diluting our dollar and they should be keeping it strong. it needs to be put back on the gold standard please...and the fed needs to be audited and ended.

November 05 2010 at 11:20 AM Report abuse +1 rate up rate down Reply
scottee

our buying power is very close to being destroyed already. the fed keeps printing and diluting our dollar and they should be keeping it strong. it needs to be put back on the gold standard please...and the fed needs to be audited and ended.

November 05 2010 at 11:20 AM Report abuse rate up rate down Reply