Analysts said the proposal was an indication of Beijing’s fears that actions being taken to save the domestic US economy would have a negative impact on China.
“This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC.
It's clear that China is concerned about inflation. It is equally clear that the Fed - the only entity which can create inflation - is not. If you haven't already done so, now is a good time for to prepare - as China is preparing - for inflation. Reduce debt and save as much as possible if you believe dollars are going to be more plentiful and thus, cheaper. Many recommend buying gold as a hedge against inflation.
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