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Hong Kong stocks opened slightly lower Friday morning, extending a sell-off in New York and Europe as traders fretted over central bank plans to push interest rates higher to fight inflation. news online
The Hang Seng Index slipped 0.13 percent, or 24.89 points, to 19,343.70.
The Shanghai Composite Index lost 0.39 percent, or 12.51 points, to 3,156.13, while the Shenzhen Composite Index on China’s second exchange eased 0.56 percent, or 11.24 points, to 2,043.67.
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Notes from APS Radio News
Often, during the past few decades, when the Federal Reserve had engaged in monetary expansion, a number of corporations purchased their own shares of stocks, increasing share prices.
And so it’s been these past three years.
Beginning in the early part of March 2020, the Federal Reserve embarked on a massive program of monetary expansion, or, what the media have called quantitative easing.
Thus, between the end of February 2020 and May of this year, the US central bank added about $4.8 trillion to its holdings, by purchasing billions of dollars’ worth of corporation and government bonds each and every month during that period.
During the lockdowns and restrictions imposed during what the media and others called the “pandemic”, as well, on the fiscal side, Congress authorized the expenditure of trillions of dollars, in the context of what was called stimulus spending.
Also, during that period, lockdowns caused the closure of hundreds of thousands of small and medium-sized businesses, while larger entities like Walmart were allowed to continue conducting business.
The combination of lockdowns, which eventually contributed to the onset of shortages of various goods and services, and expansive monetary and fiscal policies has contributed to higher rates of inflation.
Other contributing factors have been shortages produced by way of sanctions imposed following Russia’s invasion of Ukraine and instances of price gouging by a number of large corporations.