Re: Can China have growth without inflation?

from what is written here, this fellow fyfpoon must be telling lies to
be once an eocnomics major !!!!!
his knowledge about economics is just more ignorant than an GCE O level.

inflation is inevitably linking to credits as M2/M3, the increase of
which is the chief factor for asset inflation, not the interest.
interest rate will only be affected when the demand for credit is
overhelming to the increase in M2/M3.

in the past years, interest rate are politically raised to fight against
asset inflation and failed. even the rate is raised to 14% per annum,
the asset inflation even go more fiercely, until the USA budget go on
surplus, resulting to the horrible financial crises. because the issue
of treasury bill contracts in supply to make the M2/M3 decrease.

since this fellow is saying either country to include PRC.
PRC is in such control over economy to raise up the quick asset ratio to
contract the M2/M3 to make the bank suffers from interest income.
in free ecnomics, the lending and borrowing interest rates must be
stretched wide to maintain bankers' profit.
but PRC is state-owned to pin on profit. so politically PRC need not
consider any increase of interest rate !!!!!
she can eat up the bad debts, she can also eat up the loss !!!!!


fyfpoon@xxxxxxxxx wrote:
I was once an economics major and a very poor one. That was why later
on I switched to an interdisciplinary mixture of economics and
political science. I do recall, however, that an ideal notion of the
economists' is growth without inflation. Frankly I wonder whether
this is ever possible or it simply exists in the theoretical ivory
tower of the economists'.

I perceive the phenomenal 'growth' in the housing markets of both
China and North America to be a form of galloping inflation that has
resulted from the ample availability of credit. In China some
economists blame on the link between RMB and US$ as the culprit of
asset inflation, while in the US the budget deficit is viewed as the
reason behind the US housing sector inflation.

In China, the government has performed a number of adminstrative
measures to try to slow the housing market while in the US the market
is allowed to take its own course, I think. In either country, I
don't see how asset inflation can be trimmed without having interest
rate raised. And I would like to be enlightened by some economics
experts here who have obviously done better in economics than I did
while I was in college.

Tks


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