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“The People’s Bank of China recently let overnight money-market rates soar to over 20%. The message is clear for those prepared to look for it: they are not going to fuel an extended credit bubble. The two countries have learned how damaging a bank-credit-fuelled business cycle can be, and are determined to restrict bank lending. Western commentators find this hard to understand because it does not conform to the way western monetary policy works. It seems that the leaders of both Russia and China are also painfully aware of the importance of currency stability in a way the West is not.”

Archived link: http://www.goldmoney.com/gold-research/alasdair-macleod/russia-and-china-building-their-gold-reserves.html