US floods cash to economy:
Hong Kong warns Asia crisis
JAPAN: Hong Kong’s leader warned Friday that a move to inject
billions of dollars into the ailing US economy could inflate Asian asset
bubbles and trigger a repeat of the region’s 1997-98 crisis.
Chief Executive Donald Tsang said there was a risk of “unprecedented
market turbulence” in currencies, bonds and stocks and warned that Hong
Kong is ready to take new anti-speculative steps to cool its over-heated
property market. “I am very much concerned about the impact of the US
second round of quantitative easing on Asian economies,” Tsang said,
referring to the Federal Reserve’s controversial 600-billion-dollar
attempt to reflate the US economy. Critics worry the cash surge will not
only further dilute the value of the dollar but add to the flood of
money that is chasing higher returns in Asia and dangerously inflating
stock, bond and property markets.
“This has increased the risk of asset bubbles, which will impact on
our financial stability as well as regional and global economic growth,”
Tsang said at a business forum in Yokohama, Japan. YOKOHAMA, Friday, AFP
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