Germany Says U.S. Printing Money is Currency Devaluation

The G20, actually G19 - since Brazil's finance minster did not attend, ended as expected, with a farsical declaration, but only disagreements among the nations.

China will never allow its currency to appreciate, like Japan was forced to do in 80s, and then suffer Japan's fate.

German Economy Minister Rainer Bruederle said it clearly:

The U.S. Federal Reserve’s push toward easier monetary policy is the wrong way to stimulate growth and may amount to a manipulation of the dollar,

Bernanke' strategy to jump start the U.S. economy and is expected to include greater asset purchases drew criticism.

“It’s the wrong way to try to prevent or solve problems by adding more liquidity,” the same Bruederle said, adding that emerging-market officials were among the critics.

“Excessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate,”
Timothy F. Geithner was asked whether he expected Germany’s criticisms to gain steam  “I do not.” (!)

“We are going to continue to try to strengthen the recovery under way so we can dig out of this as quickly as we can,” and does this involve strengthening the very weak US dollar?

Central Bank President Jean-Claude Trichet said that the G-20 made “no particular conclusion”

“The remark was made that the accommodating policy vis-a- vis the U.S. might mean problems for the emerging economies, at least in terms of inflation,” “The point was made that it was much more complicated than that”

The ultra low rates in the U.S. and Japan allow investors to put their money to work in places like Brazil, causing those currencies to appreciate, and asset bubbles. "Such concerns have prompted economies from South Korea to Brazil to take steps to slow the inflow of speculative cash", says Bloomberg.

“I’m not a friend of this but I can understand” why Brazil introduced capital controls, Bruederle said.

According to the Financial Times, Brazil did not attend the meeting because it has lost confidence in the G20.

Emerging-market equity mutual funds have attracted more than U.S. $60B this year and bond funds lured $41B, both on pace for record annual inflows.