Fan Gong, adviser to the Peoples Bank of China, says that QE increases capital inflows into China. China will favor administrative efforts to deal with the liquidity over rate increases, he says.
Hey, China! Remember when the Fed was ramping up rates in the mid-noughts? And you kept buying the crap out of the US bond market with the proceeds from your endless currency manipulation? And the Fed therefore failed to keep the property bubble from inflating further?
Payback’s a bitch…
