Friday, November 05, 2010

South Korea, Hong Kong, Brazil, China, Volcker Complain about Bernanke's QE Policy

A parade of countries have expressed grave concerns over the Fed's misguided Quantitative Easing policy.

South Korea Aggressively Considers Curbing Capital Inflows

On Wednesday South Korea Warns It's Close to Curbing Capital Inflows http://www.cnbc.com/id/39998421

South Korea on Thursday issued its strongest warning in months that it was close to taking steps aimed at curbing fund inflows, saying it would "aggressively" consider taking such measures.

"The government believes it needs to turn away from the perception that controlling capital flows is always bad and consider introducing measures to improve the macroeconomic prudence," the Ministry of Strategy and Finance said in a statement.

"The government will 'aggressively' consider implementing relevant measures, the ministry said after listing recent remarks made internationally in favor of capital controls.

The statement titled "a message to the markets" was issued hours after the U.S. Federal Reserve said it would buy billions more in government bonds by the middle of next year.

Brazil Central Bank Says QE Causes Distortions and Excessive Liquidity

Please consider Brazil's Meirelles: Fed's latest move on G20 agenda http://www.reuters.com/article/idUSN0424672620101105

The head of Brazil's central bank said on Thursday that the U.S. Federal Reserve's latest plan to lower domestic borrowing costs and jumpstart the ailing economy would cause further "distortions" in world markets and complicate his country's efforts to stem the rise of its currency.

"QE creates excessive liquidity that flows over to countries like Brazil," Meirelles said. "Definitely, for Brazil it does create a problem and Brazil will present proposals in that regard to several countries -- the U.S. and China -- to reach a different agreement not to generate so many distortions."

Hong Kong Monetary Authority Warns of QE Related Housing Bubbles

Bloomberg reports Fed Easing Worsens Hong Kong ‘Bubble’ Risk, Chan Says http://noir.bloomberg.com/apps/news?pid ... uSGOp8W8dk

The U.S. Federal Reserve’s expansion of stimulus will add to the risk of a housing bubble in Hong Kong and may force extra measures to cool prices, said Norman Chan, the head of the city’s central bank.

The Hong Kong Monetary Authority will “take measures that are specific to the housing market if necessary,â€