German Finance Minister: Federal Reserve Losing Credibility

German Finance Minister Wolfgang Schäuble said in an interview with Spiegel Online that Ben Bernanke and the Federal Reserve are losing credibility in relationship to fiscal policy.

Schäuble also significantly pointed out something most media don't understand or report on, and that is the Federal Reserve is manipulating their currency as much as China allegedly is when it debases the U.S. dollar by printing money, or uses quantitative easing to acquire Treasury debt (both are the same).

In other words, the U.S. is manipulating its currency, one of the reasons the Chinese have pegged their currency to it. That also forces Chinese regional competitors to acquire U.S. debt in order to try to strengthen the dollar so they compete against China in exports.

As far as the quantitative easing itself, Schäuble said the U.S. has more than enough liquidity at this time, and has no need to throw more money into the economy.

That's why he says he rejects the economic argument behind the reason for implementing another round of printing money.

He's referring to pushing the value of the U.S. dollar down so American exports can rise, which he doesn't believe is going to happen.

Schäuble concluded the reason Germany and others have success with exporting has nothing to do with manipulating currencies buy over the increased competitiveness of companies.

America has lived on "borrowed money for too long," said Schäuble, adding it has inflated its financial sector when it didn't need to and hasn't paid attention to small and medium-sized businesses.