China Gives Us A Tale Of Two Monetary Policies

While the Fed is talking seriously about tightening (perhaps not tightening enough but it will tighten), China is going in the opposite direction, opening the credit and money supply floodgates.

Beijing showed just how serious it is about rebooting the stalling Chionese economy, when the latest amount of total social financing and RMB loans accelerated materially and blew away market expectations. Indeed, as shown below, both new TSF and RMB loans were the highest on record with the former surging by a 6.170 trillion

The world is getting to see the two policy responses to inflation and price bubbles: 1) burst the bubble and brace for impact (the Fed's plan) or 2) inflate a bigger bubble (Beijing's solution).

Which is the better policy? We may soon find out.