"The USA lived off credit for too long, inflated its financial sector
massively and neglected its industrial base. There are many reasons for
America's problems—German export surpluses aren't one of them."
- Wolfgang Schäuble, German finance minister, Wall Street Journal, November 8, 2010
"With all due respect, US policy is clueless. It's not that the Americans haven't pumped enough liquidity into the market. Now to say let's pump more into the market is not going to solve their problems."
- Wolfgang Schäuble, German finance minister, Financial Times, November 5, 2010
"The Federal Reserve's proposed policy of quantitative easing is a dangerous gamble with only a small potential upside benefit and substantial risks of creating asset bubbles that could destabilise the global economy. Although the US economy is weak and the outlook uncertain, QE is not the right remedy."
- Martin Feldstein, Financial Times, November 3, 2010
"It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity and Competitiveness. It is not a viable, feasible strategy and we will not engage in it."
- U.S. Treasury Secretary Timothy Geithner, Financial Times, October 19, 2010
"Yes, a sustained deflation would be a big problem, but it is unlikely in today's circumstances. Countries with a depreciating exchange rate, an unsustainable budget deficit, and more than $1 trillion of excess monetary reserves are more likely to inflate. That's our problem today, and it's another reason the Fed should give up this nonsense about more stimulus and offer a credible long-term program to prevent the next inflation."
- Allen Meltzer, Wall Street Journal, October 11, 2010
"…Given the magnitude of annual budget deficits and the ballooning of outstanding public debt, the standard linear economic models used to project the impact of fiscal restraint or fiscal stimuli may no longer be reliable. In extraordinary times, the economy may be close to non-linear phenomena such as a rapid deterioration of confidence among broad constituencies of households, enterprises, savers and investors."
- European Bank President Jean-Claude Trichet, Financial Times, July 23, 2010
"The correct conclusion in my view is that we need to be pre-emptive in avoiding these types of problems in the future. Monetary policy should not be aimed at cleaning up a mess, but leaning against the wind to avoid the mess in the future."
- Stephen Roach, chairman of Morgan Stanley Asia, March 30, 2010
- Bear Case
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