China delivers Fed a commodity shock

At a very inconvenient moment, along comes the panicky tyrant and drops an inflation bomb on the Fed with a new 16-point plan to revive property construction:

1. Property development loans for developers

Financial institutions should treat property developers under state or private ownership equally.

Lenders should specifically support developers that have focused on real estate businesses and have sound corporate governance.

2. Home-buying requirements for individuals

Support local governments to “reasonably” set down-payment thresholds and mortgage rate floors in a city-specific approach to accommodate basic and improving housing demand.

Optimize purchasing rules on first homes by new city dwellers.

3. Construction companies

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.