Speigel Interview with German Finance Minister Schauble

I was reading the Speigel Interview with the German Finance Minister Wolfgang Schauble (available here: Speigel - Schauble) and I wanted to post some comments I thought were interesting and relevant.

SPIEGEL: But the German economy benefits from the fact that German industry has focused primarily on foreign markets and wages have hardly gone up in years. The Americans see this as unfair.Schäuble: The German export successes are not the result of some sort of currency manipulation, but of the increased competitiveness of companies. The American growth model, on the other hand, is in a deep crisis. The United States lived on borrowed money for too long, inflating its financial sector unnecessarily and neglecting its small and mid-sized industrial companies. There are many reasons for America's problems, but they don't include German export surpluses.

Amen, brother.  The US fingerpointing serves no end but political ones, and the last I checked finances, when left to politics, suffers a severe fate.

SPIEGEL: Last week, the US Federal Reserve Bank decided to flood the economy with $600 billion in new money. Will this stimulate the economy as hoped?  Schäuble: I seriously doubt that it makes sense to pump unlimited amounts of money into the markets. There is no lack of liquidity in the US economy, which is why I don't recognize the economic argument behind this measure.

Okay, thought I was the only one confused by the Fed's actions.  Guess not.  Confused might be the wrong word - inability to swallow the logic is perhaps a better way to phrase it.

SPIEGEL: Sounds good. But first the measures will have to be approved by the individual governments, on the one hand. On the other hand, it's completely unclear what the participation of private investors will look like. Schäuble: We are in the process of working out the details within the German government and at the European level. It's already clear today that the new mechanism will not apply to old debt but only to new loans. I imagine that all bonds issued by euro countries will contain clauses in the future that specify exactly what happens to the claims of creditors in case of crisis.

Found this interesting.  I imagine it could look like something of the old Landesbank structure given the grandfathering of debt and, therefore, the implicit guarantees.  This would serve to bifurcate the debt after an adoption, with "old debt" trading tight to "new debt" and the possibility - in the event of a restructuring - of massive international legal arguments and cases.