Saturday, August 8, 2009

Full Speed Ahead for Monetary Inflation in China

China's top policy makers reiterated that the country will keep its expansionary policies in place, reports WSJ.

"The direction of macroeconomic policy cannot change," Zhu Zhixin, vice chairman of China's National Development and Reform Commission, the economic planning agency, told reporters at a news briefing earlier in the day on Friday. "If we waver in our policies, we will inevitably cause a reversal of the economy's stabilization and improvement," he said. "That would be like giving up midway and wasting our earlier efforts."

On the other hand, if they continue to print money, they are setting up for a major round of price inflation and a major economic bubble.

Note to China: Stop the money printing now, when the negative ramifications will be only mild.

1 comment:

  1. Wenzel,

    Do you see Hang Seng and other Chinese markets growing even while US and other equities markets where printing is relatively not so rampant deterioriate?