investmentwatchblog.com / February 22nd, 2013
Bank of England closes in on China currency deal
Sir Mervyn King, Governor of the Bank of England, is on the brink of striking a deal with the People’s Bank of China which would cement the UK’s role as the leading G7 trade hub for the world’s fastest growing currency.
The Bank of England expects to sign a final agreement to set up a three-year yuan-sterling swap line “shortly”, during a meeting between Sir Mervyn and his counterpart Zhou Xiaochuan in Beijing.
European and US officials have been pressing China for years to do more to open up the yuan to market forces, saying its artificial weakness was one of the key imbalances of the global economy.
Beijing is slowly delivering, although it still keeps a tight rein on gains for the currency for fear it will weaken its export-powerhouse economy, which has been the biggest engine of global growth for a decade.
Fed Downplays New Bubble Worries And Planning QE5
Federal Reserve Chairman Ben S. Bernanke minimized concerns that the central bank’s easy monetary policy has spawned economically-risky asset bubbles in comments at a meeting with dealers and investors this month, according to three people with knowledge of the discussions.
The people, who asked not to be identified because the talks were private, said Bernanke made the remarks at a meeting in early February with the Treasury Borrowing Advisory Committee. Fed spokeswoman Michelle Smith declined to comment.
The Fed chairman brushed off the risks of asset bubbles in response to a presentation on the subject from the group, one person said. Among the concerns raised, according to this person, were rising farmland prices and the growth of mortgage real estate investment trusts. Falling yields on speculative- grade bonds also were mentioned as a potential concern, two people said.
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