Bernanke Takes Aim at China

[WestVirginiaRebel]

Wall Street Journal:

Federal Reserve Chairman Ben Bernanke fired back amid criticism at home and abroad of the Fed's easy-money policies, arguing that China and others are causing global problems by preventing their currencies from strengthening as their economies boom.

By keeping their currencies artificially weak, Mr. Bernanke argued in Frankfurt Friday, China and other emerging markets are allowing their economies to overheat, preventing trade imbalances from adjusting and worsening what he called a "two-speed" global recovery.

Their "strategy of currency undervaluation" is preventing more "balanced and sustainable" global growth, he warns, echoing a view expressed by Obama Administration officials.

Mr. Bernanke has come under attack for the Fed's decision to purchase $600 billion in U.S. Treasury bonds in an effort to drive down long-term interest rates. Critics in the U.S say it could cause inflation. Critics abroad say the flood of dollars that the Fed is effectively printing to finance its bond purchases is pouring into overseas markets and could cause asset bubbles.

Some also have accused the Fed of trying to weaken the dollar to spur U.S. exports.
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More scapegoating from the Fed? Or, whose idea was it to try and print more money that they couldn't afford?