Resumption of economic growth in China could protect the world from the problem of deflation , analysts TeleTrade. Despite the multi-billion dollar injection into circulation , deflationary pressure was surprisingly quite strong and it became a nightmare for the developed economies of the world . Self-replicating cycle of falling prices may lead to the fact that as a result , most of the revenue will eat service existing debt . In such conditions, the influence of central banks is quite limited and ineffective.
Save the situation from a deflationary spiral may increase in commodity prices , and that China can play a key role. At a time when China’s economic growth based on investment , rising prices for raw materials dispersed inflation. Now the country switched to a growth model built on the consumption of raw materials and cycle ended , analysts say TeleTrade.
On the other hand , the end of the super cycle is not completing the full cycles as such. Any growing optimism towards China entails rising commodity prices and inflation on the launch costs. While such optimism is not observed.
Today in China, there is a fairly steady downtrend in the market, although this fall and has attractive side . Chinese assets and their positive assessment may eventually attract investors who have gone to the U.S. market for quality. Yes, and there is potential for growth can be seen longer. Thus, a difference of potentials. Parish money to Chinese markets enliven the situation and provoke a rise in raw material . That’s when you may receive the inflationary pressure that is so necessary now developed countries.
But it is believed that China is now more concerned with their credit problems, as this bubble is now the size of the U.S. banking system , and Japan combined . This means that the Chinese authorities are currently extremely disadvantageous to heat our economy and , consequently, for the rest of the world continue to deflationary pressure and drawdown.
