China Says Fed Easing May Flood World Economy With ‘Hot Money’
November 8th, 2010Gold is at $1404 right now, a new record high.
Via: Bloomberg:
Chinese Vice Finance Minister Zhu Guangyao said the U.S. Federal Reserve’s decision to pump $600 billion into the economy might “shock” emerging markets by flooding them with capital.
The first round of quantitative easing, as the Fed policy is termed, in 2009 was justified because the global economy lacked liquidity, Zhu told reporters in Beijing today. With a recovery now under way, new purchases of Treasuries to inject funds into the financial system may be destabilizing, he said.
“Around the world we have $10 trillion of hot money flowing around, more than the $9 trillion in hot money at the beginning of the global financial crisis,” Zhu said. The U.S. “has not fully taken into consideration the shock of excessive capital flows to the financial stability of emerging markets.”
Zhu’s comments underscore concern around the world that the Fed’s decision will benefit the U.S. at the cost of stability and growth elsewhere. Chinese and European leaders have said they plan to discuss the impact of quantitative easing at the Group of 20 summit this week in Seoul as well as the dangers of competitive currency devaluations.
I’m sure there’s no “hot money” heading for china.
We live in a world full of lies.