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WASHINGTON (AP) — The Federal Reserve's plan to buy more Treasury bonds has incited critics at home to complain of inevitable high inflation and financial turmoil.
It turns out many foreigners are pretty angry, too. They say the Fed's $600 billion program is a scheme to give U.S. exporters an unfair edge — one that endangers the global economy.
Is it? Or is the Fed's plan a credible way to help end a desperate jobs crisis and revitalize a still-tepid economy?
In either case, few dispute that Fed Chairman Ben Bernanke is taking a gamble. Whether or not his plan succeeds in aiding the U.S. economy, it risks triggering a trade war and encouraging dangerous speculation in financial markets.
Already, the finger-pointing threatens to wreck this week's summit of world leaders in Seoul, where the Fed's plan has set off vociferous debate. President Barack Obama on Thursday was forced to defend U.S. policies at the summit, saying "the most important thing that the United States can do for the world economy is to grow."
Many economists say the Fed didn't have much choice — not with U.S. unemployment stalled at 9.6 percent, short-term interest rates already near zero and Congress refusing to spend more to jolt the economy.
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