China begins stimulus exit

China's move to raise the cost of three-month bills will probably lead to the nation's first interest-rate increase in almost three years by September, a survey of economists showed.

Premier Wen Jiabao’s government may keep the increase in borrowing costs this year to less than 1 percentage point because it wants to ensure a sustained economic rebound.

www.bloomberg.com...

So China basically created $585 billion of additional wealth out of thin air. And is now charging it with higher interest to stimulate it even further and avoid runaway inflation. Nice. up:

The same thing cannot be done in the US because it will hurt businesses.

www.bloomberg.com...