China, Brazil and other emerging markets pledge to come up with new measures to curb capital...


China, Brazil and other emerging markets pledge to come up with new measures to curb capital inflows stemming from the Fed's easing; their opposition to QE2 means next week's G-20 meeting is very unlikely to produce any sort of meaningful compromise on global imbalances and currencies.

Comments (3)
  • Diggintunnels
    , contributor
    Comments (331) | Send Message
     
    Trade war, stage one complete (QE2). Retaliation by the BRIC's will produce protectionism by the short sighted politicians (stage two). China can then just refuse to buy any more debt from the US (stage 3). Check Mate. Welcome to the new depression.
    4 Nov 2010, 07:55 AM Reply Like
  • eggfaced
    , contributor
    Comments (292) | Send Message
     
    I think this is a crucial chance for the emerging economies, especially China, to break away from the monetary policy of the US. Our policies are damaging their economies and they are trying to break free.

     

    We have been the caboose of the global economy for years riding behind the engine of the emerging markets. Now we are holding the whole train back and may get cut loose. Only a matter of time before the dollar pegs start to be removed and our debt becomes toxic. Already starting to happen with other central banks are raising rates.

     

    That being said America should be focusing on it's own structural problems and not pinning blame on China's exchange rate or trade surplus.
    4 Nov 2010, 08:32 AM Reply Like
  • j_remington
    , contributor
    Comments (1341) | Send Message
     
    The reality of QE2 is that emerging economies are totally against it. Brazil and China and Australia have already enacted policies to curb inflation... knowing that inflation is at inappropriate levels for the current stage of their economic cycle. Paying exorbitant product prices, commodity prices and creating excess businesses leads to disaster when growth contracts. Other countries are familiar with the results of the US housing debacle.

     

    The US is basically using the FED to create export demand... i.e. sell the emerging markets the goods the US produces when the prices are at their peak(generate the highest profit margins). Also, weaken the dollar so exported US goods/services are more competitive. And US companies' use of foreign goods/services are expensive(PROTECTIONISM by weakening currency).

     

    Expect protectionist measures to be enacted immediately. Protectionism will curb worldwide economies on a greater scale than prior to QE2.

     

    Stock markets are in for some volatile times.
    4 Nov 2010, 02:28 PM Reply Like
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