Andy Xie: Emerging Market Inflation Will Hit The U.S.

Andy Xie

You have to admit, Andy Xie is emerging as a doomsayer in the same right as Nouriel Roubini or Marc Faber, with China and America as his favourite targets.

His latest — QE2 will backfire and the inflation we’re seeing in developing countries will hit the U.S. in two years:


Central banks, especially the Fed, assume that they can and should solve them through monetary policy. This creates a buzz in the financial markets, and is misinterpreted as a sign of economic improvement – but the effect peters out after a short period of time. When the financial markets weaken, the central banks apply it all over again. But the effects fade faster with each use. The process ends when developed economies, especially the U.S., are infected with inflation from emerging economies. We are likely to see signs of this story ending in 2012.

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