China alarmed by US money printing

www.telegraph.co.uk...

The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy.

Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".

"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said.

Market crisis 'will happen again'

The world will suffer another financial crisis, former Federal Reserve chief Alan Greenspan has told the BBC.

We've been doing this for some time now. Why they would be alarmed now beats me.

The paper is worth more than the dollar it's self.

auntie is right... I don't know why they're so upset just now all of a sudden. This has always been going on.

reply to post by Frankidealist35


Maybe they just realised the implications.