Monday, January 17, 2011

Central banks are the chief culprit in rising prices

 According to CNBC news, the recent inflationary pressures on the European Central Bank President's speech and the euro's rise, the ECB's next move concern. European Central Bank in 2008 in response to higher prices and higher interest rates than the ECB is also faced with raw materials and to solve the problem of rising oil prices, and some countries have to face the euro zone government debt crisis. So some economists believe that higher interest rates alone can not completely solve the problem, a large number of the world's major central banks buy assets to increase money flow caused by rising commodity prices is the main reason. Some analysts say, as long as central banks stop buying large quantities of assets, commodity prices will be re-determined by the supply and demand.

Federal Reserve Chairman Ben Bernanke recently hinted the United States will not launch a third round of the quantitative easing policy. The Fed's asset purchase program may stop in June of this year. This global price fall would be a good news. 

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