Europe is "dumbfounded" by Fed's investment decisions
Ben S. Bernanke, Chairman of the Federal Reserve, makes remarks at the inaugural meeting of the Financial Stability Oversight Council in Washington, DC.
TEXT OF INTERVIEW
JEREMY: Fed Chairman Ben Bernanke is speaking right now in Germany. He's defending his extraordinary measures to boost the economy here in the U.S. The Fed's recent decision to pump $600 billion more into the system has drawn criticism from economic leaders around the world.
But speaking just moments ago, Chairman Bernanke didn't back down.
BEN BERNANKE: Insufficiently supportive policies in advanced economies could undermine the recovery not only in those economies, but for the world as a whole.
Marketplace's European correspondent Stephen Beard is covering this story for us and he joins us now live from London. Hi Stephen.
STEPHEN BEARD: Hello Jeremy.
HOBSON: Mr. Bernanke is still speaking right now in Frankfurt. Tell us what he's been saying.
BEARD: He's saying the best way to promote global recovery and support the dollar is through stimulating growth in the U.S. economy. He's saying its vital for everyone that the U.S. returns to robust growth. He's talking about the unacceptable level of U.S. unemployment -- 9.6 percent and could get higher. And he's denying that the Fed is trying to inflate the U.S. out of trouble, driving down the dollar to reduce the country's debt.
HOBSON: What do the Europeans have against the Fed's action to pump all this money into the economy?
BEARD: The Germans in particular are critical. The German finance chief called the Fed's policy "clueless," he said he was "dumbfounded" by it. The Germans feel it will lead to yet more imbalances in the global economy. A lot of hot money rushing around, competitive devaluations of currencies and so on. The Germans say "In Europe we're not printing money and buying German government bonds. We don't have to. Why not take a leaf out of our book?" Here's Andrew Hilton of the CSFI think tank.
ANDREW HILTON: Their economy is strong, exports are strong. Growth is actually picking up in German. They're saying we're doing it right, why don't you follow our example?
And the Fed chairman's not the only one getting his ear bent by Europeans. President Obama will face similar criticism at an EU summit here in Europe tomorrow.
HOBSON: Marketplace's Stephen Beard in London.