Fed sneezes and China gets a cold

William Pesek JR

China"s asset bubble can be traced back to the Fed"s commitment to low interest rates

It is not surprising China, Asia"s second-largest economy, is experiencing a dangerous asset bubble. It seems a reach to blame Fed chairman Alan Greenspan and his colleagues here in Washington. After all, Asia is not a huge blip on the Fed"s radar screen these days. The Fed also has taken its share of flack for the US bubble of the late 1990s. But the US central bank"s global reach is being felt in Asia. The Fed commitment to keeping US interest rates low for a considerable period of time has fuelled speculation in high-risk assets. The by-products of this speculation are the wealth effect...