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.

Gold Top Performer for Decade

Gold Leading Investment Over Last 10 Years

With the last decade experiencing some tough economic times, the price of gold and the attraction of gold as a place of safety has encouraged investors to place their money in the yellow metal, which has resulted in it becoming the best performer over the last 10 years, generating profits of 277 percent during that time.

Other metals performing strongly were platinum and silver, which also grew by over 200 percent over that same period of time, with platinum enjoying a increase of 230 percent, while silver grew by 227 percent.

Gold should continue to grow in value for years to come, as continuing economic data and the printing of money by central banks continue to keep it at the top of the list for many investors.

Now the sovereign debt crisis in Europe has added another reason to invest and hold gold, and that situation is far from being worked out or understood how deeply it will go.

Gold Leading Investment Over Last 10 Years

Peter Schiff: Gold Could Rise to $5,000 and More

As measured against gold, Peter Schiff said in a recent interview that gold and the Dow could end up trading at a ratio of one-to-one, as against the existing level of 9.7-to-1. Consequently, gold could very easily rise to $5,000 or more according to Schiff, over the next several years.

What that means is the Dow will plunge another 90 percent from where it stands now as measured against gold.

Even though gold has risen significantly, it's still being held back by concerns that will eventually fall away when it starts climbing from between $2,000 and $3,000 an ounce.

Schiff said it could take on similar growth as tech stocks did in 1999, possibly moving up in $100 increments a day at many points.

Much of Schiff's view on gold is based on the misguided policies of the Obama administration, along with the Federal Reserve, which refused to cut back on printing money and bailing out banks and companies they consider "too big to fail."