Obama Cranks Up Currency Heat on China as Gold, Oil Prices Soar

U.S. President Barack Obama, center, speaks as Indian Prime Minister Manmohan Singh, left, and President Pratibha Patil, right look on during a state dinner at Rashtrapati Bhavan, or President's Palace in New Delhi, India, Monday, Nov. 8, 2010. Indian and U.S. companies have discussed or signed over $14.9 billion in deals around Obama's trip, which will support 53,670 U.S. jobs, the White House said. (AP Photo/Manish Swarup) (AP)

On a day when the price of gold soared past $1,400 an ounce and oil hit high for the year, President Obama found himself in India Monday on the defensive over the Federal Reserve's decision last week to print more money so it can buy up $600 billion in government bonds -- a move Fed Chairman Ben Bernanke insists will stimulate an economy stuck in neutral.

While the White House traditionally steers clear of commenting directly on Fed actions, Obama insisted that "the Fed's mandate -- my mandate -- is to grow our economy. And that's not just good for the United States, that's good for the world as a whole."

Obama's comments came in the face of stepped up criticism from China, Russia and Germany over the Fed's decision and just days ahead of the all-important G-20 meeting of the world's leading economic powers. The summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency fight that could endanger the global economic recovery.

German Finance Minister Wolfgang Schauble lashed out at U.S. pressure on Berlin to rein in the country's surging exports, accusing Washington of hypocrisy and telling Der Spiegel magazine in an interview that ran over the weekend, "the American growth model … is stuck in a deep crisis," Reuters reported.

"It doesn't add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank's printing presses, artificially lower the value of the dollar," he told Reuters.

Data released Monday by Germany's federal statistical office showed the country's trade surplus shot up $23.42 billion in September, evidence that the German economy continues to rely on exports to drive its recovery, Reuters reported.

Obama took aim at the new report: "We can't continue to sustain a situation in which some countries are maintaining massive [trade] surpluses, others massive deficits, and there never is the kind of adjustments with respect to currency that would lead to a more balanced growth pattern."

The heightened rhetoric in the growing trade and currency battle came as gold prices topped $1,398 an ounce for the first time. Oil prices also shot up, to $87, the high for the year.

Some economists have warned that Bernanke's decision to have the Fed buy $600 billion in government bonds could do more than stimulate the economy -- it could also drive up food and energy prices, which would boost inflation, something that could further impede economic growth.