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Lending expansion often follows inflation, as higher asset prices and higher incomes support larger loan balances.

Cutting lending as this article implies can set off downward spirals and rising unemployment if domestic demand isn’t somehow supported by
enhancing consumer incomes.

3-Top China bank ICBC halts roll-over of some loans

ICBC says lending pace has slowed at end of January

* Latest signal of tightening that may rein in growth

* Official newspaper says some banks have recalled loans

* Chinese regulator renews demand for even pace of lending


4 Responses

  1. Warren:

    Doesn’t China have inflation problems right now? I think there was a TIME article saying property is up 80% over 2008.

  2. Warren, 212 million unemployed people is enough people to have a rival to any large nation on this planet of destitute souls angry, hungry, and maybe taking us to the wars that happened in the past with such high levels of global unemployed youth. 212 million is an awesome number of humans to try and manage and pacify, even with SCE.


    27 January 2010 – The mounting number of jobless people around the world has climbed to an historic high with nearly 212 million unemployed last year – or 6.6 per cent of the global workforce – and the situation in Europe is likely to worsen before it gets better, according to a new United Nations report.

    In its annual Global Employment Trends report the International Labour Organization (ILO) estimated that 34 million more people joined the ranks of the unemployed in 2008 and 2009, pushing the total number of out-of-work adults to a record high.

    “We need the same policy decisiveness that saved banks now applied to save and create jobs and livelihoods of people,” said ILO Director-General Juan Somavia, ahead of the annual World Economic Forum gathering in Davos, Switzerland.

    “This can be done through strong convergence of public policies and private investment,” said Mr. Somavia, stressing that each year “the global labour market has expanded by 45 million people. Therefore recovery measures must target job creation for young men and women entering the labour market for the first time.”

    The report also stated that some 633 million workers and their families were living on less than $1.25 per day in 2008, with as many as 215 million additional workers at risk of falling into poverty in 2009, underscoring the urgency of establishing wide coverage of basic social protection schemes to cushion the poor against the impact of fluctuations in economic activity.

    Warren, I think a good analogy perhaps would be that you are working on the engine of my mt900 trying to make the car go faster, but the car only has 2 seats and 20 people are riding inside. At this point I don’t really care how fast or efficient the car is, it was only designed for 2 passengers and someone let 20 people get in the car.

  3. and somehow they all support the idea that you need more investment for lower unemployment, when in any case full employment is the starting point, and unemployment is induced by the introduction of an overly tight monetary system

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