Posts Tagged ‘reserve requirement’

Notes From Underground: Laugh, Laugh, I Thought I’d Die

February 19, 2012

Two big issues have been the rage of financial news during the weekend. First, the Chinese Central Bank lowered its reserve requirements by 50 BASIS POINTS in what is being termed an effort to engineer a “soft landing” and prevent a drastic fall in GDP. This is my first laugh as the raises in the reserves during the last 18 months did little to slow the economy. Besides, if the Chinese Politburo wants to install pro growth policies it has control of the credit creating mechanism. As the markets are looking for anything that sustains the recent global equity rally, why not the Chinese reserve ratio?