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The global economy warrants a big dose of caution

Discussion in 'Market News' started by Lily, Oct 25, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    When central banks feel the need to inject more economic stimulus a full six years into a recovery it is a sign of further trouble ahead

    The People’s Bank of China was preparing to spring a surprise while President Xi Jinping was taking a selfie with Manchester City star Sergio Aguero. On Friday, the central bank in the world’s second-biggest economy cut the cost of borrowing for the sixth time in a year.

    This move has implications, none of them especially cheery despite the knee-jerk increase in share prices that followed. Those investors who thought the announcement in Beijing was a big buy signal should ask themselves whether this was a sign of strength or a sign of weakness.

    Related: China interest rate cut fuels fears over ailing economy

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