Global liquidity has exceeded pre-crisis levels
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If the United States in November restart the quantitative easing policy of flooding the pattern of global liquidity will further exacerbate the global scope of monetary infighting and rising asset prices will also continue. The most typical result is a large number of low-interest U.S. dollar will resume a global flows, the dollar carry trade more active, "hot money" into the emerging and developing economies as a speculation.
This flow pattern for the current, the International Monetary Fund Managing Director Zhu Min, the Special Adviser on a recent "Forum Annual Meeting 2010, Zhongguancun," said that global liquidity has exceeded pre-crisis levels. According to him, the base currency of the developed countries around the world to use the M2 measure, in 2000, developed countries, M2 is 4.5 trillion U.S. dollars in 2008 rose to $ 9,000,000,000,000. "Financial crisis has resulted in decrease in the number M2, but with the implementation of monetary policy around the developed countries has risen to 10 trillion M2. In other words, in today's case, the global liquidity crisis, even more than before levels. "Zhu Min said.
Political commissar, chief economist at Industrial Bank, said Lu, from the central bank's point of view, the recent launch of base money does indicate the current market liquidity is more abundant, and Around the world, the Western economies, the higher the uncertainty, the U.S. relaxed the money supply and low interest rates to begin to seek more capital investment in high-yield market, and East Asia with high expected growth in the future to attract more foreign capital to the eye, inevitably there have been "hot money" disappeared.
This is of concern to Zhu. "High level of interest rates in emerging economies, high growth, the environment, so a large scale to global capital in emerging economies, this will lead to appreciation of exchange rates in emerging economies, increased foreign exchange reserves, inflation and asset bubbles. This is the face of emerging economies significant challenges. "he said.
Awash with liquidity, caused by hot money counterattack
Quantitative easing in the Fed hinted after the restart, the global stock market rally of the global commodity markets hit record highs, a new round of asset bubbles emerge. Meanwhile, the huge inflow of funds into emerging economies, and its asset markets bear the brunt.
Fund tracker EPFR G lobal 15 said Wednesday by the Federal Reserve will ease monetary policy once again expected to promote the emerging stock markets last week, the sixth consecutive week of inflows increase. E PFR G lobal data show that the global emerging stock markets last week, a total international capital to absorb 4.1 billion, accounting for global equity markets over the same period of $ 7,630,000,000 to absorb more than 50%. Zhou Xinxing bond market to absorb on a total of 1.5 billion U.S. dollars of international funds. E PFR that emerging stock markets worldwide this year, total international capital to absorb 60 billion U.S. dollars, only early in September to 23.3 billion U.S. dollars into emerging market bond funds appeared in a net inflow of 41 billion U.S. dollars.
In China, A shares since October into a strong rise in the property market is undoubtedly the international capital coveted battlefield. China Development Research Foundation, Tang Min, deputy secretary general of that hot money will be poured into China, and pay special attention to hot money into real estate.
In this regard, the British "Financial Times" pointed out that the U.S. printing strategy will increase the pressure of hot money in Asia, which allow fast-growing economies in Asia Pacific dilemma facing further deterioration of these economies on the one hand facing the requirements of its permit its currency appreciation, while worried about surge in capital inflows would undermine their economic stability.
United States, "The Wall Street Journal," also believes that strong growth in the domestic economy with the West abnormal loose monetary policy with a huge flow of funds flock to emerging markets, but lurking behind the prosperity of this risk. Central banks in emerging economies can delay raising interest rates to avoid more hot money inflows, but this may lead to asset bubbles and inflation. |
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By :
Jessie Stone
Submitted
2010-10-27 08:36:59 |
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