U.S. President Barack Obama defended the Federal Reserve's policy of printing dollars on Monday after China and Russia stepped up criticism ahead of this week's Group of 20 meeting.
The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency row escalating into a rush to protectionism that could imperil the global recovery. [ID:nSGE6A703T]
But there is little sign of consensus.
The summit has been overshadowed by disagreements over the U.S. Federal Reserve's quantitative easing (QE) policy under which it will print money to buy $600 billion of government bonds, a move that could depress the dollar and cause a potentially destabilising flow of money into emerging economies.
"I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole," Obama said during a trip to India.
"And the worst thing that could happen to the world economy, not just ours, is if we end up being stuck with no growth or very limited growth," he said.
European Central Bank President Jean-Claude Trichet said all participants at a meeting of the world's central bankers in Basel, Switzerland had insisted they were not pursuing weak currency policies.
Monday, November 8, 2010
GLOBAL ECONOMY-Obama returns fire after China slams Fed's move | Reuters
via reuters.com
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After Obama Slammed by Unilateral Fed Move China Returns Fire
China flexed its military muscle Monday evening in the skies west of Los Angeles when a Chinese Navy Jin class ballistic missile nuclear submarine, deployed secretly from its underground home base on the south coast of Hainan island, launched an intercontinental ballistic missile from international waters off the southern California coast.
The reported Chinese missile test off Los Angeles came as a double blow to Obama. The day after the missile firing, China’s leading credit rating agency, Dagong Global Credit Rating, downgraded sovereign debt rating of the United States to A-plus from AA. The missile demonstration coupled with the downgrading of the United States financial grade represents a military and financial show of force by Beijing to Washington.
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