Ban elevator economics

July 5 was a major event day for the world’s economies. The ECB cut rates by 25 basis points, the Bank of England expanded quantitative easing and China surprised everyone by a 31-basis-point cut in its lending rate to 6%, and a cut in deposit rates to 3%. This coordinated monetary easing was conducted both by economies growing at a very slow pace (eurozone and England) as well as an economy growing at the fastest pace in the world (China). The latest industrial production data for China is a growth of 10%, and latest inflation data is at 3%.

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