China says printing of dollars could spark crisis
China says printing of dollars could spark crisis as Asia braces for impact of Fed moveBy Joe Mcdonald
BEIJING (AP) – Unrestrained printing of dollars could spark a new global crisis, an adviser to China’s central bank warned Thursday as Asian governments braced for an unwanted flood of capital into their markets following the Federal Reserve’s move to inject more money into the U.S. economy.
Opposition by Beijing and other governments to the Fed’s move might hamper efforts to agree on measures to fix strains in the global economy at next week’s Group of 20 leaders summit in Seoul.
"So long as the world shows no restraint in issuing reserve currencies such as the dollar, and this is not easy, the outcome will be what knowledgeable Westerners dread: Yet another crisis is inevitable!" said Xia Bin, an adviser to the People’s Bank of China, in a commentary in a newspaper published by the bank.
The commentary did not mention the Fed’s widely expected announcement Wednesday but the decision to publish it suggested Beijing opposed the strategy behind the plan to sink $600 billion into government bonds in an effort to revive economic growth.
Asian governments worry that money generated by the Fed’s action will add to the flood of cash pouring into the region seeking better returns, pushing up the value of Asian currencies and making exports more expensive.
http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D9J9ADV80A currency War indeed!