Fed, ECB Throwing World Into ‘Chaos': Joseph Stiglitz
Tuesday, 5 Oct 2010
Ultra-loose monetary policies by the U.S. Federal Reserve and the European Central Bank are throwing the world into “chaos” rather than helping the global economic recovery, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.
A “flood of liquidity” from the Fed and the ECB is bringing instability to foreign-exchange markets, forcing countries such as Japan and Brazil to defend its exporters, Stiglitz told reporters in a conference at Columbia University.
“The irony is that the Fed is creating all this liquidity with the hope that it will revive the American economy,” Stiglitz said. “It’s doing nothing for the American economy, but it’s causing chaos over the rest of the world. It’s a very strange policy that they are pursuing.”