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PRESS RELEASE


China Condemns U.S. Policy
of Drowning World in Liquidity
As Hyperinflationary

Jan. 18, 2011 (EIRNS)—"When the bubbles explode one day, few will be left unscathed." So warns, regular columnist for the People's Daily, Li Hong, at the start of the Chinese Presidential visit.

"The U.S. Federal Reserve's extraordinary easing policy is creating two bubbles that don't bode well for all of us: a stock market bubble at home, and commodity price bubbles abroad. When the bubbles explode one day, few will be left unscathed, with deeper and bloodier scars cut on the trunks of major economies.

"It is sensible for President Hu Jintao, who kicked off his second state visit to the United States today, to 'prod' the U.S. on its risky 'quantitative easing' (QE) monetary policy, because it will prove to be monetary bungling."

But it is not just China that is at risk, Li goes on to say:

"... other emerging economies could find the heat hotter to achieve enviable growth as before. To thwart rising inflation, these countries will have to raise interest rates in 2011, which discourages private sector investment and weakens growth."

Li's comments forcefully reiterate Hu Jintao's widely publicized statement on the U.S. dollar before beginning his trip:

"The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level."