AP/LA Times/EU-Digest: Germany's Merkel criticizes central banks' approach in financial crisis

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Germany's Merkel criticizes central banks' approach in financial crisis

German Chancellor Angela Merkel has voiced skepticism about leading central banks' approach to tackling the economic crisis, suggesting that they may be storing up more trouble for the years ahead. Merkel's comments come as the European Central Bank has faced criticism from some analysts for not being as aggressive as either the U.S. Federal Reserve or the Bank of England, both in cutting interest rates and in promoting measures such as bond purchases to boost the money supply.

Merkel appeared to defend the ECB's more conservative instincts and raise questions about the Fed and Bank of England actions. "The independence of the European Central Bank must be preserved and the things that the other central banks are doing now must be reversed," Merkel said in a speech Tuesday, the text of which was posted on the government Web site. "I view with great skepticism the powers that the Fed has, for example, and how, in the European area, the Bank of England has developed its own little lines," she said, adding that the ECB "also bowed somewhat to international pressure" with its decision to buy bonds. "We must together return to an independent central bank policy and to a policy of good sense," Merkel said. "Otherwise, in 10 years we will again be standing at exactly this point."

Note EU-Digest: Mrs. Merkel is absolutely right. Even Thomas Jefferson one of the founders of the United States said: "If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children wake up homeless on the continent their fathers conquered"