Posted on 04/17/2011 5:30:38 AM PDT by TigerLikesRooster
MARKETS APRIL 15, 2011.
Political Overlords Shackle China's Monetary Mandarins
By BOB DAVIS
BEIJING—China's premier, Wen Jiabao, warned last month that inflation is like a tiger—once unleashed, it is "very hard to cage again."
Amid growing worries over inflation in China, many question what the People's Bank of China can do to put on the brakes without dampening rapid economic growth. WSJ's Bob Davis explains to David Reilly the complications of adjusting policy in the country.
Yet Beijing has been slow to pounce, even though food prices are rising at a nearly 12% annual clip and overall inflation hit 5.4% in March, according to numbers released Friday, more than twice the pace of a year ago. The steps it has taken thus far, including last week's 0.25% interest-rate increase, have been modest.
If it had been solely up to the People's Bank of China, the nation's central bank, the inflation-busting would have begun sooner, according to people involved in the matter. But the process of fighting inflation here is Byzantine, much like the Chinese government itself.
Monetary policy in the world's second-largest economy involves dueling bureaucracies, secretive committees and a Communist Party whose influence is hidden but pervasive, these people say. No single official is in charge, making it nearly impossible for other leading nations to coordinate economic policy with China.
(Excerpt) Read more at online.wsj.com ...
Sounds like Japan caught in Fukushima crisis. This is not a news, though.
P!
” Monetary policy in the world’s second-largest economy involves dueling bureaucracies, secretive committees and a Communist Party whose influence is hidden but pervasive, these people say. No single official is in charge,... “
Hmmmmm.....
In other words, the ‘second-largest economy’ is becoming just like the ‘first-largest economy’......
But, but....the Free Traders will say that such Statism and Big Government is good....that we should continue to have massive trade deficit and debt with Communist China....
In order to maintain the exchange rate with the dollar, they have to print money to buy up dollars at the fixed rate. So if we print money, the inflation turns up in China.
If they want to stop inflation, they will have to allow their currency to strengthen.
China is buying private gold...all they can get and paying spot + prices. They are actively scouring the Pac Rim for old coins and jewelery.
Current Chinese regime is not known for breaking status quo, no matter how damaging it would be in the long run. Just as U.S. keeps printing money, they will, too. Both will go down together.
Is Chicom up to something along that line? When the bad day comes, the money to pay their army is essential to their survival.
I believe you are referring to the phoney free traders, who are essentially import unilateralists. The import lobby knows nothing of the state-made barriers to our exports nor cares...nor will they acknowledge the damage to everything from job quality, national security, and the integrity of the dollar.They are, and always have been, selfish traitors.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.