During the last debate, Mitt Romney emphatically stated he would blast China for manipulating its currency the first day he takes office. Talk about priorities. Of all the nation’s pressing issues, the minute the oath is over, he’ll be calling out China for manipulating the yuan.
A remark like that should cause exasperation for anyone in the know. As Mary Anastasia O’Grady writes in The Wall Street Journal, “To be consistent, Mr. Romney should call out the Federal Reserve on day two for engaging in its own currency manipulation by way of ‘quantitative easing,’ which undermines the value of the dollar relative to Latin American currencies.”
About a month ago, Brazilian Finance Minister Guido Mantega called out Ben Bernanke for manipulation, blasting the Fed’s QE3 (or QE Infinity) policy for setting off currency wars.
Again this year we’ve had the Fed, the ECB, and the Bank of Japan all announcing easing within days of each other. And the effects are inflation in China, food riots in Egypt, stock bubbles and consumer price inflation in Brazil, and higher unemployment in developing countries.
International Monetary Fund Managing Director Christine Lagarde took the central banks to task in a speech delivered at the IMF’s October meeting, warning that easy money from developed country central banks creates asset price bubbles in developing countries.
Read More at dailyreckoning.com . By Douglas French.