German FinMin Warns of Market Bubble

The global economy faces a financial bubble from central banks pumping cash into economies, Germany’s finance minister has warned.

“We should take on board the lessons of the last crisis,” said Wolfgang Schaeuble in his Budget speech.

He added that economic reforms should not be neglected in favour of action from central banks.
The comments come after the European Central Bank (ECB) said it would extend its stimulus programme if needed.

The ECB launched its €1.1 trillion bond-buying scheme – a form of monetary policy or quantitative easing – in January to support the eurozone economic recovery, which the bank’s president, Mario Draghi, said could be extended beyond 2016 if needed.

Mr Schaeuble has repeatedly warned against an over-reliance on central bank stimulus to prop up economies.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza