Wednesday, January 26, 2011

Western printing busy emerging economies with large asset bubble

The World Bank, International Monetary Fund (IMF) and other institutions have recently warned that the US and UK funding for gate wide open again, you may give emerging economies brought an influx of hot money and the asset bubble significant risk, to a certain extent, this also to the current world economy have a maximum of "time bombs".

International Monetary Fund (IMF), the first Vice-Chairman Lipski pointed out that the huge amount of capital mobility opportunities, but also may cause the asset price bubbles and financial instability.

United Kingdom in the financial times last week stated that the United States of banknote printing strategy, will intensify the pressure on Asian hot money, these economies on the one hand facing it allows national currency appreciation, while also worried that the surge in capital inflows would undermine the stability of the national economy.

United States Wall Street Journal, believes that the domestic economy, strong growth combined with Western anomalies loose monetary policy, promote the huge capital flows to emerging markets, but the potential risk behind the prosperity.

The Nobel economics laureate, Stiglitz said that despite the Fed's policy appears to be able to stimulate the United States economy, but in fact does not achieve the intended purpose. Because with a large number of financial flows to the world, problems were brought to the world.

Experts advise that, although these seem to be "happy", but Western wanton new round of quantitative easing measures to emerging markets and world economy risks may greatly exceeded expectations. Fitch Asia Pacific Director Andrew 19, notes that large-scale quantitative easing in the West, perhaps to bring in many emerging economies, creditworthiness risk that loose monetary and fiscal discipline, or closely related to the economy and the US dollar, the country most likely to be affected.

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