US criticizes Europe and Japan, seemingly unaware of any irony......

Friday 10th April 2015

US criticizes Europe and Japan, seemingly unaware of any irony......

 

"U.S. Chides Europe, Japan for Overreliance on Monetary Policy" , The Wall Street Journal , World News

In its semi-annual currency report, the US Treasury has chastised those who have relied too heavily on monetary policy alone to revive moribund economies. That may raise a few eyebrows amongst those who would point out that not so long ago problems between the Administration and Congress meant that the US was effectively unable to bring in broader measures and itself relied on a massive QE programme and six years of near-zero interest rates ..... in other words, monetary policy.

Still, the Treasury may have a point. It worries that the weaker foreign exchange rates "enjoyed" by the likes of Germany and Japan and brought about in part by loose monetary policy means that these countries are exporting their way back to growth (Germany has the world's largest trade surplus). Fair enough, one might argue, but the US believes this is just transferring growth from one area to another and what's needed are measures to stimulate domestic demand.

 There were also some words of criticism to China and South Korea for boosting their global competitiveness by keeping their currencies at artificially low levels, a charge both nations deny. No change there, then.