Recently, many local economy review and regional stock market price and capitalization weight has shown the economy was on the path of recovery and bullish market is coming. This is a good news that every investors be keen to hear and this is the ONLY good news what we have currently. What i can capture on what has happened on our planet economy is the economic stimulus packages that worth 14 million US Dollar has worsen the US economy structure, instead Asian economy recovery has been expected to become the "medicine" to accelerate world's consumption.
Even Asian economy performance has become first light of morning for global economy recovery, but we still can't too optimistic. There are 2 sakes here: First, governmental over expansionary budgetary policies, implemented together with approach zero nominal interest rate, failure to regain the global's demand. Second, excessive cash flow inject into financial market is probably to prompt up the asset price bubbles, and lead to false appearence on the economy.
Some of the economicts have retract theirs opinion on the types of our economy recovery process from "W" & "L" form, to "V" recovery and has proposed that even the risk on economy recovery has been scatter, but the central bank on this planet should need to retain the expansionary monetary and budgetary policies since they have viewed positive growth of the second quaters Korean and China GDP. Indeed, it is a fact that we may to worry.
Massive expansionary policies and market stimulus packages which implemented by China has lead to market bubbles and publics over heated market sentiment has worsen the condition. Every investors and consumers be keen to listen to China's bullish market (false appearence) news. But it is not a great medicine for China's economy. It is because the bullish sign of the stock market also can't reduce the degree of high dependent on the export to abroad. The bullish sign of the stock market is just merely an outcome of increase the governmental liability to foster up such short-term prosperity. This is a common phenomena facing by Asian now.
Monetary policy just can be a supplement to the budgetary policy. Asian's recovery sign is thanks to the consecutive economy stimulus packages outcome. But, the effect will scatter following with time. At this moment, the central bank should decrease the interest rate to prop up the market. It is just a temporary scheme, and merely alleviate the symptoms and not can't cure the root. It just will cause economy sink into asset price bubbles and traps, but it seems like economy growth. The optimistic expectation on Asian economy recovery by "V" shape , has foment the assets price bubbles trap.
Even Asian economy performance has become first light of morning for global economy recovery, but we still can't too optimistic. There are 2 sakes here: First, governmental over expansionary budgetary policies, implemented together with approach zero nominal interest rate, failure to regain the global's demand. Second, excessive cash flow inject into financial market is probably to prompt up the asset price bubbles, and lead to false appearence on the economy.
Some of the economicts have retract theirs opinion on the types of our economy recovery process from "W" & "L" form, to "V" recovery and has proposed that even the risk on economy recovery has been scatter, but the central bank on this planet should need to retain the expansionary monetary and budgetary policies since they have viewed positive growth of the second quaters Korean and China GDP. Indeed, it is a fact that we may to worry.
Massive expansionary policies and market stimulus packages which implemented by China has lead to market bubbles and publics over heated market sentiment has worsen the condition. Every investors and consumers be keen to listen to China's bullish market (false appearence) news. But it is not a great medicine for China's economy. It is because the bullish sign of the stock market also can't reduce the degree of high dependent on the export to abroad. The bullish sign of the stock market is just merely an outcome of increase the governmental liability to foster up such short-term prosperity. This is a common phenomena facing by Asian now.
Monetary policy just can be a supplement to the budgetary policy. Asian's recovery sign is thanks to the consecutive economy stimulus packages outcome. But, the effect will scatter following with time. At this moment, the central bank should decrease the interest rate to prop up the market. It is just a temporary scheme, and merely alleviate the symptoms and not can't cure the root. It just will cause economy sink into asset price bubbles and traps, but it seems like economy growth. The optimistic expectation on Asian economy recovery by "V" shape , has foment the assets price bubbles trap.
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