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Mingdong Wu

 
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  • No Matter What The Unemployment Rate, The Fed Will Have To Taper [View article]
    The Fed is handing out a pie, and the wealthier is getting the bigger slice. Of course, someone pays mortgage may benefit from lower interest payment. But when compared with people owns multiple homes as investment, the benefit of QE to mortgage-payers is much less significant. When inflation arrives, the working class will be burdened more because a larger part of their incomes goes to everyday expenses. QE is an effective solution for financial liquidity crisis. When such crisis no longer exists, QE does more harm than good.
    Sep 10 01:35 AM | 1 Like Like |Link to Comment
  • With Or Without Tapering, The Fed's Plans Will Have Dire Consequences [View article]
    It will last for a very long time. Because the US dollar is the reserve currency, if a country profits from international trade, it will choose to keep its “winnings” mostly in US dollars. US government bonds are better than cash because debt pays interest.
    Sep 8 08:43 AM | 2 Likes Like |Link to Comment
  • Is The Housing Bubble In China About To Burst? [View article]
    Any bubble, by definition, will burst. My argument is that, in contrast to the predictions by some popular economists in China, this bubble will last at least several more years before bursting.
    Sep 8 08:31 AM | Likes Like |Link to Comment
  • With Or Without Tapering, The Fed's Plans Will Have Dire Consequences [View article]
    Thanks very much for reading my writing and providing feedback.

    1. Sorry for not making myself clear. When I used the word “unprecedented”, I meant in terms of scale. What Bank of Japan has done during the past 20 years, except recently under Abe’s new administration, was mostly lowing rates to boost bank lending while the Japanese government tried to boost local economic activities through incremental government spending. Therefore, the past policy initiatives in Japan are very different from the initiatives taken by the US Fed since 2008.

    2. Your analysis of the velocity of money is very precise. In assessing potential inflation risk, M2 is much more important. Although the definition of monetary base and M2 are different, you may find, based on the your own analysis, the expansion of total money supply by the Fed, taking into consideration of the velocity factor, is significant, and today there is no recession in the United States.
    Aug 29 11:03 AM | 1 Like Like |Link to Comment
  • With Or Without Tapering, The Fed's Plans Will Have Dire Consequences [View article]
    Based on the relative asset prices in China, Chinese Yuan is overvalued against the US dollar. However, Chinese Yuan debase is unlikely in the near future. As long as its current account remains positive, as long as the Chinese economy keeps growing, the true effect of excess money printing by the Chinese central bank will be less felt. In addition, the Chinese Yuan is not yet a freely-exchangeable currency. Repatriating of foreign investment from China to offshore in short time frame carries a significant cost. There is no model we may draw upon at this time because China has a unique set of regulations and policies.
    Aug 28 10:43 AM | Likes Like |Link to Comment
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