Since the start of the financial crisis, Chinese officials have issued a number of warnings that the US should not inflate away its mounting debt burden. Before these latest comments, however, Beijing had generally been most critical of US fiscal policy, urging Washington to spend less.

But speaking at a conference in Beijing, Mr Liu [Mingkang, China’s chief banking regulator] said the Fed’s policy of maintaining low interest rates together with the weak dollar posed a threat to the global economic recovery.

“[It] is boosting speculative investment in stock and property markets and will pose new, real and insurmountable risks to the global recovery and particularly to the recovery in emerging markets,” said Mr Liu, who is chairman of the China Banking Regulatory Commission.

“The situation has already encouraged a huge dollar carry trade and had a massive impact on global asset prices,” he added.

Read it all.

Filed under: * Culture-Watch • Globalization • * Economics, Politics • Economy • The U.S. Government • Federal Reserve • * International News & Commentary • America/U.S.A. • Asia • China

1. Ad Orientem wrote: As I type the US Dollar Index is down (again) and is currently hovering just over $75 which has been its support level.  In overseas trading commodities are mostly up.  Gold is up (again) by about $11.00. My reading of the current situation suggests that we are in the early stages of a currency crisis.  I expect things to deteriorate sharply in the coming months. November 16, 1:14 am | [comment link]

Registered members must log in to comment.