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| Politics Forum Index » Economic Politics Forum » ROTFLOL! first hong kong, singapore and brazil... |
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 Posted: Fri Nov 20, 2009 5:30 am |
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ROTFLOL! first hong kong, singapore and brazil abandoned laizzez
faire, now the rest of asia may follow, oh where, oh where will the
cranks and parasites go:the free market schmucks did it to
themselves:Asia Considers Capital Controls
yep, after the cult turned our manufacturing and jobs over to
sweatshops for more profit, they got our money, know how, and jobs,
now they are telling you bozos to go shove it!!!!!!!!!!!!
ROTFLOL!!!!!!!!!!!!!!!
http://www.bloomberg.com/apps/news?pid=20601110&sid=aXJZJUKXcM3A
Asia Considers Capital Controls to Stem Bubble Danger (Update2)
By Shamim Adam
Nov. 20 (Bloomberg) -- Asian policy makers are studying capital
controls to limit “hot money” inflows that may stoke asset bubbles and
force their currencies to appreciate.
Officials from India, South Korea and Indonesia are among those
expressing concern over overseas capital stoking stock and real estate
prices. Indonesia’s central bank is “seriously” studying a limit on
inflows to short-term bills, Senior Deputy Governor Darmin Nasution
said yesterday. Taiwan last week banned international investors from
placing funds in time deposits.
Asia is leading the world’s recovery from its deepest recession as
demand for the region’s goods rises. Policy makers are concerned that
stronger currencies will stymie the potential rebound in exports and
encourage capital inflows that may spur inflation and undermine
financial stability.
“If Asian central banks act on these concerns, it will have important
implications for currencies in the region and may slow or put a break
on the sharp appreciation trend that has been in place,” said Mitul
Kotecha, head of global foreign- exchange strategy at Calyon in Hong
Kong.
Eight of 10 Asian currencies tracked by Bloomberg have strengthened
against the U.S. dollar this year, led by the Indonesian rupiah, South
Korean won and Indian rupee. Housing prices in some Asian nations are
rising, while the region’s stock markets have surged in the past six
months.
Stocks, Real Estate
In Hong Kong, capital inflows are fueling investment in real estate
and equities, driving up the city’s benchmark Hang Seng Index 57
percent this year. Residential property prices climbed 28 percent,
according to Centaline Property Agency Ltd.
The MSCI Asia Pacific Index has climbed 66 percent since March amid
signs the global economy is recovering from its worst slowdown since
World War II. The measure is valued at 22 times estimated earnings for
this year, more than twice the level 12 months ago.
Asian economies battled a surge in speculative funds as recently as
2007 from investors drawn by economic growth, interest-rate
differentials and prospects of rising currencies.
While policy makers across the region have cut borrowing costs, some
to record lows, to battle the financial crisis, investors encouraged
by Asia’s growth outlook over the U.S. and Europe are picking it as
their choice destination.
“These economies could of course raise interest rates to contain
inflation and increases in asset prices,” Hong Kong Monetary Authority
Chief Executive Norman Chan said yesterday. “But the fear is that once
interest rates are raised the carry trade will become even more
active, attracting even more fund inflows. Asian economies are
therefore facing a dilemma.”
Brazil, India
Brazil last month was among the first to take steps to combat
speculative inflows. Its government announced Oct. 19 a 2 percent tax
on foreign purchases of fixed-income securities and stocks.
India may take steps to slow capital inflows if foreign investment
surges, Finance Secretary Ashok Chawla said yesterday. Policy makers
may set a limit on the amount of money that local companies can borrow
from abroad, the Economic Times reported, citing a Finance Ministry
official it didn’t name.
Foreign funds purchased a net 732.5 billion rupees ($15.77 billion) of
Indian stocks this year, after being net sellers in 2008, sending the
rupee 4.7 percent higher and hurting sales at exporters including
Gokaldas Exports Ltd.
South Korea may discuss measures to address the U.S. dollar carry
trade that is causing its currency to strengthen, Kim Jong Chang,
governor of the Financial Supervisory Service, said yesterday.
Government agencies plan to hold talks on what can be done on the
issue, Kim said.
Taiwan Impact
Taiwan central bank Governor Perng Fai-nan on Oct. 14 expressed
concern foreign investors have about NT$500 billion ($15.5 billion) in
Taiwan dollar accounts, five times more than what the central bank
considers acceptable. These funds may be used for purposes other than
stock investments, Perng said.
The island’s decision to implement capital controls may have had some
effect. Taiwan has seen a decline in speculative capital from
overseas, with the amount falling to NT$350 billion from about NT$400
billion a month earlier, Perng said yesterday.
The Federal Reserve’s policy of keeping interest rates near zero is
fueling the wave of speculative capital that may cause the next global
crisis, Hong Kong’s Chief Executive Donald Tsang said Nov. 13.
Carry Trade
“We have a U.S. dollar carry trade at the moment,” Tsang said. “Where
is the money going -- it’s where the problem’s going to be: Asia. You
can see asset prices going up, not only in Korea, in Taiwan, in
Singapore and in Hong Kong, going up to levels that are incompatible
or inconsistent with the economic fundamentals.”
The carry trade is where investors borrow cheaply in one currency and
use the funds to invest in other currencies.
Federal Reserve Bank of Philadelphia President Charles Plosser said
capital flows into Asia are a result of a stronger recovery in the
region.
“The flows are not such that I consider them to be either threatening
or inconsistent with fundamentals,” Plosser said in Singapore
yesterday. “To the extent that you believe that the prospects for
economic growth are stronger in Asia than they are in the U.S. right
now, you would expect to see some of the capital flows going in that
direction.”
To contact the reporter on this story: Shamim Adam in Singapore at
sadam2 at (no spam) bloomberg.net
Last Updated: November 20, 2009 05:58 EST |
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