The Global Central Bank Policy Is Linked To &Nbsp, And The Central Bank Is Ready To Stabilize The Market.

Gold 72 hours global central bank policy linkage

Europe and America

In the 72 hours after the downgrading of the US sovereign debt rating last Friday, the central banks of various developed economies formed a linkage that they would strongly support economic growth, while the Central Bank of the emerging economies began to slow down the previous tightening pace and choose to maintain stability and wait for the best. The most typical example is South Korea.

South Korea's central bank announced on Wednesday that it will keep its benchmark interest rate unchanged at 3.25%, the central bank's benchmark interest rate unchanged for second consecutive months in 11 months.

Korea's stability

South Korea's central bank financial and monetary Committee, 11, said, affected by the U. S. sovereign credit rating, the overreaction in the domestic financial market in South Korea, coupled with the financial crisis in Greece, Italy and other European countries and other dangerous factors leading to the world economic turmoil, the central bank decided to continue to observe the market dynamics and keep the interest rate unchanged.

Many Korean experts point out that with the increase of public expenditure and abnormal weather, the price of agricultural products will continue to rise.

In order to stabilize prices, the call for raising interest rates has been heard in Korea.

Since the outbreak of the international financial crisis in the second half of 2008, the Bank of Korea has lowered its benchmark interest rate from 5.25% to a record low of 2%.

However, due to rising inflation pressure, the ROK raised its benchmark interest rates by 0.25 percentage points in July, November and January, February and June respectively.

Some analysts worry that by the abnormal weather and other factors, the Korean consumer price index rose for 7 consecutive months to maintain a high level of more than 4%, in the case of high prices,

However, the financial and Monetary Commission of the central bank pointed out that the current predicament in Europe and the United States is hard to solve in the short term, and may become a long-term unstable factor in the world economic and financial markets. The overreaction of the Korean financial market also makes the central bank aware of the need to observe the market dynamics carefully.

In addition, the Indonesian central bank also decided to maintain its benchmark interest rate unchanged at 6.75% on the 9 day.

Indonesia's inflation rate continued to decline in July, and the consumer price index rose 4.61%, or 5.54% in June and 5.98% in May.

The Central Bank of Russia held second policy decisions last week to maintain interest rates unchanged, suggesting that monetary policy remains unchanged in the near future.

Golden 72 hour global central bank

In addition to emerging economies, the Central Bank of the developed economies is in urgent need of action.

The group of seven held an emergency telephone conference on the 7 day after the downgrade of the US debt.

Within 72 hours after the conclusion of the meeting, the central banks of several major economies came forward to make every effort to "stabilize the market".

The Fed promised publicly that it would keep interest rates close to zero until at least mid 2013, at the end of the 9 interest conference, while the European Central Bank intervened in the bond market.

In addition, Japan reiterated its doubts about the strong yen.

According to Japanese media 11 reported that, as the global stock market fell sharply, while the yen continued to strengthen, the Bank of Japan is considering taking more relaxed measures to provide support to the market.

The Swiss central bank has increased the reserve requirement from 10 to suppress the overvalued Swiss franc.

Under the mainstream policy of interest rate stability, there is another surge of possible interest rate cuts: central banks such as Australia and Europe are listed here.

According to overseas media quoted Goldman Sachs economist David Colosimo said that the Australian central bank is expected to cut interest rates by 50 basis points this year.

The group predicted that the Australian central bank would raise interest rates by 25 basis points in the first quarter of 2012, and will remain calm until then.

Deutsche Bank also expects the Australian central bank to cut interest rates by 50 basis points in the year. The bank had expected the Bank of Australia to raise interest rates by 25 basis points in November.

The European Central Bank is also expected to end the pace of interest rate hike and start cutting interest rates.

In addition, the Central Bank of Norway announced on 11 that it maintained the index interest rate unchanged at 2.25%. The current chaotic situation also gave up its original interest rate increase plan.

The latest picture of the dilemma of monetary authorities

The debt problem in Europe and America has made it difficult for major central banks in emerging Asian economies.

The Asian Development Bank warned 9 that Asian emerging economies should consider measures to control excessive fluctuations in capital flows, including minimizing overseas speculative capital inflows.

The Asian Development Bank, based in Manila, pointed out in its 2011 Asian economic monitoring report that these measures could include minimizing overseas speculative capital inflows and promoting more stable long-term capital flows to meet investment needs in the region.

However, the bank's report also points out that the outlook for Asian emerging economies is no longer as bright as it was before the global economic uncertainty increased.

Some analysts believe that if the central bank officials mistakenly injected too much money into the market, domestic inflation will rise and the price of treasury bonds will be frustrated.

According to historical data, the yield of us 10 - year treasury bonds rose to 10.3% at the end of 1979, 7.9% in the early 70s, and the rate of inflation rose more than 13% during the period.

If the Central Bank continues to tighten monetary policy, the economy will plunge into recession and the stock market will fall because corporate profits will suffer.

During the Great Depression of 1930s, the Dow Jones Industrial Average fell by nearly 40%.

Vincent Reinhardt, a resident scholar at the American Enterprise Institute in Washington, said: "this is the thing you most fear -- rising prices or the economic downturn.

"Vincent served as the chief monetary policy strategist of the Federal Reserve during 2001 to 2007.