Liu Junluo: The Fed Will Trap the PBOC

Bloomberg: PBOC Vows to Walk Fine Policy Line as Debt Endangers Growth

“We will prevent excessive easing to avoid cementing economic distortion or pushing up debt and leverage levels; on the other hand, we will create a neutral and appropriate monetary environment” for growth, the People’s Bank of China said in its monetary policy report published on Friday.

The Chinese media focused on a different part of the report:

"To improve the market environment and revitalize the stock of assets, establish long-term mechanism for the healthy development of real estate."

iFeng: 中央会议再提楼市建立长效机制 释放一大信号

Liu Junluo thinks the PBOC is going to fail. A couple of months ago, Liu was explaining how The Fed's Rate Hike Lies Will Cause Another Great Depression. Today on his Weibo, he still argues the Fed isn't going to hike rates. Later this year, they will announce rates hikes are off the table and QE4 is on the table. Chinese asset prices will zoom because monetary policy is too easy in that environment. Rising agricultural prices will push up inflation in China and the PBOC will hike rates, sinking the economy.

Google translate version:

The Fed "2015 hike strategic deception" strategy: trick by China's central bank to push up domestic asset prices stable exchange rate. But in fact, the US does not raise interest rates, pushing the "QE4 + food inflation." United States 2 combination cards to play, China's central bank to raise interest rates only desperate fight. Why the United States will win? US-Japan TPP advance, the country even the "Fed to raise interest rates in 2015 was downright lie," do not know. Expected in the fourth quarter this year, China's central bank to raise interest rates madness.