I think this quote by Felix Zulauf accurately asses the situation in China:
"The decisive factor is China, which is reporting inflation of just over 5%. In reality, it's probably twice that." bold added
Rublin, Lauren R., 2011. Attention, stockpickers. Barron's, Jan. 15.
A free float Yuan would help combat the severe inflation situation in China, yet the government will not do the reasonable thing and let a free float happen. Inflation is making the lives of Chinese people very difficult.
It is the deeply held belief by Chinese officials that everything can be controlled, including currency exchange. This should be of great concern to the global economy. I do not think China wants to stop just with controlling foreign exchange.
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