The Chinese authorities signaled Wednesday that bank lending would slow significantly this year and reportedly instructed some banks to curb loans — the latest in a series of moves designed to forestall inflation and stave off bubbles in the stock and property markets.
Liu Mingkang, chairman of the China Banking Regulatory Commission, said he expected Chinese banks to extend loans totaling about 7.5 trillion renminbi, or $1.1 trillion — down nearly 22 percent from the record 9.6 trillion renminbi lent last year.
China reports GDP Thursday and expect another blow out, estimates expect 10.8%.
On May 22, 2009 Governor Arnold Schwarzenegger quoted in Time
"I understand that these cuts are very painful and they affect real lives. This is the harsh reality and the reality that we face. Sacramento is not Washington -- we cannot print our own money. We can only spend what we have."
Why not? Private banks do it all the time and its legal. According to the Federal Reserve Bank of Dallas
Banks actually create money when they lend it.
According to Huffington Post there is a State owned bank that has been doing this since 1919.
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