Talk: of the to be vigilant against excess liquidity

Talk: of the to be vigilant against excess liquidity

March 12, 2009/Dong Xiucheng

At present, countries all over the world stimulating the economy, are increasing capital investment, from a global perspective, rescue funds can be used to describe astronomical and description. Remember a year ago, talking about most people in the world of excess liquidity problems due to excess liquidity of funds lead to soaring energy prices and stock market abnormal prosperity in the world, and now also put a lot of money to the market, seems to have excess liquidity problems in the past has petered out.

It seems to me, money into too large if the major input to the real economy, had an adverse impact not expected, but if a lot of money flowing into the virtual economy again, then return to so-called excess liquidity problems.

At present, neither the developed nor the developing countries, funds on the market is a concerted policy choice, but we must clearly realize that, once the economy improves, particularly stock market resurgence, and real estate recovery will direct funds to a virtual economy, then I am afraid that States must once again face the foam problem.

Therefore, in the current critical situation, we must be vigilant appears again the question of surplus liquidity, injection of rescue process must be gradual and orderly progress, avoiding erratic economic development situation.