US financial policy ‘clueless’: German Finance Minister

Helicopter Ben is back, showering the already wealthy with more money

With all due respect, U.S. policy is clueless,” Schaeuble said. (The problem) is not a shortage of liquidity. It’s not that the Americans haven’t pumped enough liquidity into the market.”

Bernanke has said the Fed’s new plan to buy $600 billion of bonds is specifically designed to pump up the stock market. So, the German Finance Minister is just a big silly, isn’t he? He actually thought the Fed was working to boost the US economy in general, not just the financial sector. How naive.

(If the Fed buys back the bonds, then there will be an enormous amount of cash that has no place else to go but the stock market. It’s been dubbed the “Benanke Super-Put“, a put being an option trade that protects one against downside risk.)

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