prc30 on Nostr: Regardless of all the “noise”, my goal is to remain consistent this week with ...
Regardless of all the “noise”, my goal is to remain consistent this week with Notes on various #China commentary.
China Morning Missive
The People’s Bank of China has held 1 and 5 year prime rates in place.
Regardless of whatever it is you may have read in the past six months, there’s been no actual “bazooka” stimulus out of Beijing. The Central Bank has been doing all of the heavy lifting.
And for those of you new to my various China commentary, you should know that “Keynes is Dead in China” meaning that the central government policy makers fully understand that printing gobs of money doesn’t solve the problem.
What has actually been underway, and continues to playout, is an aggressive systemwide deleveraging of the economy. Please remember this every time you see some headline talking about the weakness of the Chinese economy or the “threat of deflation”. These are just the outcomes you are supposed to witness when you starve the world’s secondary largest economy of fiscal liquidity.
Will this experiment work? No one knows, but my experience would suggest that it is dangerous to bet against the Chinese policy makers.
China Morning Missive
The People’s Bank of China has held 1 and 5 year prime rates in place.
Regardless of whatever it is you may have read in the past six months, there’s been no actual “bazooka” stimulus out of Beijing. The Central Bank has been doing all of the heavy lifting.
And for those of you new to my various China commentary, you should know that “Keynes is Dead in China” meaning that the central government policy makers fully understand that printing gobs of money doesn’t solve the problem.
What has actually been underway, and continues to playout, is an aggressive systemwide deleveraging of the economy. Please remember this every time you see some headline talking about the weakness of the Chinese economy or the “threat of deflation”. These are just the outcomes you are supposed to witness when you starve the world’s secondary largest economy of fiscal liquidity.
Will this experiment work? No one knows, but my experience would suggest that it is dangerous to bet against the Chinese policy makers.