Wednesday, December 8, 2010

Unofficial China on the US and the Dollar

We have heard from Mr. Daokui before, and this is not the first time he has said something along these lines.  My concern is that the PBOC starts acting on his advice.  Admittedly, they have nowhere to go right now, but Li has a point, when Europe is better, they will be able to attract capital from China.  What will we do without our biggest buyer?

CNBC (yeah, I know):

The U.S. dollar will be safe for the next six to 12 months, because global markets are focused on the euro zone's troubles, Chinese central bank adviser Li Daokui said on Wednesday when asked about U.S. President Barack Obama's plan to extend tax cuts for all Americans.  
But Li, an academic adviser on the People's Bank of China monetary policy committee, said the fiscal health of the United States was in fact worse than Europe's, and that U.S. bond prices and the dollar would fall when the European economic situation stabilizes.
He was speaking on the sidelines of a financial forum in Beijing.

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About Me

A student of the markets that has held portfolio management, analysis and trading positions for over 15 years.