What Central Bank Policy
Means for Emerging Markets
Ian J Beattie
[email protected]
The theory
MV = PQ
China
• Exchange rate is not freely floating
So what happened?
Now other CBs play too
EU
Japan
US
Total
CRB Index
S&P 500
MSCI Far East
ADXY
Gold
VIX
But does it work, still?
Central Banks are...
• Very influential
• But not omnipotent
• Central Banks are not (should not be)
alone !
• Distortions
"You can't buck the
market"
Margaret Thatcher, 1989