Bundesbank President
Jens Weidmann
Re: Bundesbank Head Cautions Japan
Bundesbank President Jens Weidmann’s criticism of Japanese politicians’ meddling in central bank affairs can be seen as a veiled criticism of ECB policy. Weidmann warns against exchange rate wars, whereby central bankers worldwide engage in a destructive race to drive their currencies’ exchange values lower than everyone else, in the fallacious theory that doing so will spur an exports driven economic recovery. This places sound monetary theory on its head and makes central bankers no better than counterfeiters. Who would believe that a counterfeiter’s printing press would spur REAL economic output and make ALL members of society better off? Counterfeiters cause wealth to be transferred internally to the early receivers of the newly printed money at the expense of later receivers. In other words, each nation’s citizens pay the entire cost of making exports cheaper; the foreign importer gains at the expense of the exporting nation’s common citizens. Patrick Barron
