Wednesday, February 9, 2011

China Fights Inflation, Raises Interest Rates

This can't be good. They are buying up our debt and Spain's, now this is happening. There was a post I did a while back about how an economist explained that in the next few years, when the China bubble bursts, it will be disastrous for the world. Hopefully it won't be. If they do fail, hopefully by then, America will be stable again and it won't be as tough.

NY Times
: China on Tuesday raised interest rates for the third time since October, in the latest sign that the authorities were trying to temper economic growth and prevent inflation from escalating further.

The central bank in Beijing raised its benchmark one-year deposit rate by a quarter of a percentage point, to 3 percent, and its one-year lending rate by a similar amount, to 6.06 percent.

The timing of the announcement, at the very end of the Lunar New Year holiday, which has kept mainland Chinese markets closed for the last week, was in line with what many analysts had expected.

In fact, many economists forecast still more increases and other measures this year as the battle to combat price increases intensifies. “There are plenty of reasons to expect inflation to pick up further in the next few months,” Brian Jackson, an analyst at the Royal Bank of Canada in Hong Kong, wrote in a note after the rate increase announcement Tuesday.

Read the full article here

h/t Lonely Conservative

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