STOCK MARKET WATCH -- Friday, 1 November 2013

[Demeter]

45. U.S. Accuses Germany of Causing Instability By SARAH WHEATON

http://www.nytimes.com/2013/10/31/business/international/us-accuses-germany-of-causing-instability.html

BY EXPORTING TOO MUCH (LIKE THEIR UNEMPLOYMENT, INFLATION, ETC)

The United States Treasury singled out Germany for criticism in a report released on Wednesday that said Berlin’s reliance on exports was holding back its struggling partners in the European Union.

The criticism echoes longstanding complaints from European economists and international banks. But it was notable because it was included in an unusual forum: a semiannual report that usually focuses on currency manipulation. The timing may reflect the United States’ wish to influence German economic policy as Chancellor Angela Merkel forms her new government after recent elections.

The document, the Report to Congress on International Economic and Exchange Rate Policies, outlines the practices of America’s top trading partners over the first half of 2013, concluding that none “met the standard of manipulating the rate of exchange between their currency and the United States dollar” in order to gain an unfair trade advantage.

But it noted, as it often does, that China’s currency, the renminbi, is not appreciating “as fast or by as much as needed.” The report said that Chinese efforts to intervene in foreign exchange markets seem to have again escalated as concerns about the worldwide economy recede.

Yet Germany was a focus of particular — and unusual — scolding from the Obama administration, which said that Berlin’s “anemic pace of domestic demand growth and dependence on exports have hampered rebalancing” and hurt its ailing European Union partners. For decades, Germany’s manufacturers have produced more than its residents demand, sending more of its relatively low-cost goods into the international market than what it imports. Weaker economies like those in Spain, Portugal and Greece struggle to compete.