Emerging Markets - Unintended consequences of QE

Posted | 30/08/2013 / Views | 1984
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After the central bankers summit in Jackson Hole there has been a lot of talk about the effect QE has had on emerging markets (accounting for 60% of global growth) and the dire impact of any tapering of it.  QE/money printing promotes investing in risk as it provides cheap and plentiful funds.  This has seen a flight of money into emerging markets.  Even talking about reducing or tapering it has seen a subsequent flight out of them.  India captures most of the headlines but you can include Indonesia and a host of others too.  The elephant in the room is China as it wrestles with a credit bubble.  There is more talk of another Asian crisis like that of 97, but on a much much bigger scale.  What was clear from Jackson Hole is that no one knows how to fix it…