BEIJING (MNI) – A senior advisor to the Chinese government said he
was told by Treasury Secretary Timothy Geithner this week that the
Federal Reserve doesn’t have “tools or ammunition” left for another
round of quantitative easing.
But Li Yang, vice-director of the Chinese Academy of Social
Sciences, said he was told by the Treasury Secretary on Wednesday that
recent coordinated action by global central banks amounted to some form
Li did not reveal where he was talking with Geithner during the
Treasury Secretary’s two-day trip to China but said he asked what the
next round of quantitative easing may look like.
He said Geithner replied: “First, I am head of the Treasury
Department and not in charge of the Federal Reserve, but I can make some
comments,” Li told a forum here Thursday.
Geithner “said they don’t have tools or ammunition left. Then I
asked if the currency swaps and liquidity injections by six central
banks recently is some form of QE3?”
“Geithner said, ‘You could say that.’”
Li appeared to be referring to November 30 coordinated action by
the Bank of Canada, the Bank of England, the Bank of Japan, the European
Central Bank, the Federal Reserve, and the Swiss National Bank to lower
the price of dollar swap arrangements by 50 basis points.
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