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Realistbear

Oz And India Opt For Quantitative Tightening

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http://uk.finance.yahoo.com/news/aussie-dollar-breaks-the-buck-as-australia-india-fight-fed-with-quantitative-tightening-tele-29011920a5df.html?x=0

Aussie dollar breaks the buck as Australia, India fight Fed with 'quantitative tightening'
HSBC (LSE: HSBA.L - news) said emerging markets and commodity exporters such as Australia are opting for "quantitative tightening" to offset the liquidity effects of quantitative easing in the US, which is causing a flood of money into faster growing economies. Several states are toying with capital controls.
India's central bank has also tightened further, raising rates a quarter point to 6.25pc. It has imposed draconian housing curbs to reduce "excessive leveraging", limiting mortgages to 80pc of property values to ***** the housing bubble, but may have responded with too little too late.
"Interest rates have been negative in real terms for 26 months, and heavily negative for several months," said Maya Bhandari from Lombard Street Research.
"Inflation is 9.8pc
and is is going to get worse as the Fed's QE2 pushes up food prices, so a quarter point rate rise is not going to make much difference. They are relying on `administrative measures' instead of doing what they need to do," she said....../
HSBC's currency team said the Australian dollar may be nearing its peak. "One concern relates to the deflating of the property bubble in China. This could happen gently but, if not, the Aussie will not avoid the fall-out.
A sharp fall in Chinese property prices may very well lead to a deep examination of Australia's property bubble, and Australian banks,"
they wrote in a client note.
:o

It does appear that the Fed (Bernanke at least) is hell bent on forcing the rest of the world to tighten to try to offset the inflationary effects QE2 will have in coun tries other than those suffering from deflation. But waddya goin to do? Its just business and nuttin poisonal.

Edited by Realistbear

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How does the Fed printing US dollars cause inflation relative to Indian rupees? If India's currency is losing value in real terms, surely that is India's central bank's fault...

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How does the Fed printing US dollars cause inflation relative to Indian rupees? If India's currency is losing value in real terms, surely that is India's central bank's fault...

It will jack up commodiy prices from rice to cotton. I think we may be in for a surprise at 18:30 GMT tomorrow when Bernanke remains seated in his chair to tell the world the shock news about QE2.

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How does the Fed printing US dollars cause inflation relative to Indian rupees? If India's currency is losing value in real terms, surely that is India's central bank's fault...

Commodities priced usually in dollars. More dollars mean higher commodity prices. Therefore one result is "imported" inflation for a country like India. Eventually people will get sick and "fed" up with this state of affairs and maybe the dollar will lose its coveted status.

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Commodities priced usually in dollars. More dollars mean higher commodity prices. Therefore one result is "imported" inflation for a country like India. Eventually people will get sick and "fed" up with this state of affairs and maybe the dollar will lose its coveted status.

China has been flooding the world with cheap goods for years. It has resulted in a massive trade surplus which has in turn brought imbalances that have forced the US to devalue.

China = too much too quickly.

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LOL, you can't fight QE and carry trades with rate rises!

Raise rates and they'll just attract more hot QE money! QE money loves high rates and the higher they go the more QE money will arrive on their shores.

Capital controls are the only thing that can defend against QE and even then only for a certain amount of time.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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