Sunday, November 15, 2009

China Banking Regulator: U.S. Policy Fueling Asset Speculation

by Calculated Risk on 11/15/2009 09:20:00 AM

From Bloomberg: China’s Liu Says U.S. Rates Cause Dollar Speculation

“The continuous depreciation in the dollar, and the U.S. government’s indication, that in order to resume growth and maintain public confidence, it basically won’t raise interest rates for the coming 12 to 18 months, has led to massive dollar arbitrage speculation,” [Liu Mingkang, chairman of the China Banking Regulatory Commission said] ...

Liu said this has “seriously affected global asset prices, fuelled speculation in stock and property markets, and created new, real and insurmountable risks to the recovery of the global economy, especially emerging-market economies.”
President Obama will be in China today, and there will probably be some dicussion of China's exchange rate policy.