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China will use "quantitative and price tools" in an attempt to tighten liquidity and cool...

China will use "quantitative and price tools" in an attempt to tighten liquidity and cool inflation. This quantitative tightening, or QT, shows how seriously the Chinese are taking the inflationary threat. Ultimately, it is QT, not QE, that may end up being the more important policy.
Comments (6)
  • Duude
    , contributor
    Comments (3358) | Send Message
     
    I'm not so sure I agree with QT being more important to Chinese policy than QE. Its the Fed's QE that is forcing the Chinese to tighten. US quantitative easing is totally screwing with Chinese inflation. They really have no one to blame but themselves due to their adherence to pegging the Yuan to the dollar at too low of a valuation. I believe if the US economy continues on its current path of pathetic growth, more quantitative easing will make it almost impossible for China to control inflation with quantitative tightening without pushing their economy into a recession. I see quantitative easing in the US less for its benefit to our economy but more to force China to loosen their ties to the dollar.
    24 Nov 2010, 11:20 AM Reply Like
  • 424215
    , contributor
    Comments (20) | Send Message
     
    Are you suggesting quantitative tightening under current economic condition for America?

     

    Your are either naive or you have hidden agenda !!!!
    24 Nov 2010, 12:09 PM Reply Like
  • Duude
    , contributor
    Comments (3358) | Send Message
     
    No. The QT I'm referring to is that being done by China. The QE, of course, is that done by the Fed. Clearly, you didn't understand or didn't read the article.
    24 Nov 2010, 12:50 PM Reply Like
  • 424215
    , contributor
    Comments (20) | Send Message
     
    Sorry I was not referring to your comments, I am referring to the author posted the news.

     

    IMO the above news posting is yet another attempt to politicized QE program to misled the public with such a simplistic comparison.

     

    RMB is not freely traded or exchange to have huge foreign currency imported inflation, many reports of QE caused inflation in China are attempt to politicize Fed monetary policy, create trade tension as well as taking credit away from the administration. The truth is nobody know how much RMB is printed to fuse domestic demand. We assume printing is backed by US treasury bills, but their net seller portfolio of US bonds after the financial crisis speak volume.

     

    They have more tools to overcome this short term adjustment than US as their leadership and people move and speak with one voice, while we have politician, wall street money makers and reporter politicized QE2 program. American must closed rank, otherwise even good program will failed to stimulate the economy.
    24 Nov 2010, 02:07 PM Reply Like
  • Duude
    , contributor
    Comments (3358) | Send Message
     
    Sorry about the misunderstanding about who you were replying to. But I'm not so sure they're seeking to politicize it as much as to point out what seems to me quite obvious. I don't see how you can twist this to be about the administration. It is the Fed that is involved in quantitative easing, and it is most definitely having an effect on Chinese inflation. But I'm not blaming the Fed for that either. Its the Chinese unwillingness to re-peg their currency at a much higher valuation, together with the fact that just about all commodities are running inverse to the dollar which is reflecting the quantitative easing policy of the Fed. While I can't say this is the best course of action longer term, it is clearly screwing with the Chinese economy.
    24 Nov 2010, 06:20 PM Reply Like
  • 424215
    , contributor
    Comments (20) | Send Message
     
    I like to share this article ...
    seekingalpha.com/artic...

     

    65 years of peace after WW2 due to free trade with US taking major role to ensure a stable US$ that pull millions of people out of poverty.

     

    I am not aware of an alternative system till this day and I thank the wisdom of our forth father. If 1 or 2 countries decided they can out smart the system, they will face the consequences whatever it may be call ..."screw up" the Chinese economy ...

     

    Enjoy thanksgiving ....
    25 Nov 2010, 01:03 AM Reply Like
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