Friday, April 15, 2011

China's inflation jumped to a 32-month high

MSNBC:
China's inflation jumped to a 32-month high in March despite government efforts to cool an overheated economy, adding to pressure for more interest rate hikes and other controls.

Prices rose 5.4 percent over a year ago in the world's second-largest economy, driven by 11.7 percent surge in politically sensitive food costs, data showed Friday. That was up from February's 4.9 percent and a setback for communist leaders who have declared taming inflation their priority and raised interest rates four times since October.

"They will have to step up their fight against inflation," said Credit Agricole CIB senior economist Dariusz Kowalczyk.

Analysts say prices are being driven by the dual pressures of consumer demand that is outstripping food supplies and a bank lending boom that was allowed to run too long after it helped China ward off the 2008 global crisis.
 Wait a minute. Think about that last paragraph. Two issues;

1) A lending boom is causing inflation. What did the Chinese people do with the money which flooded the market in the "Lending Boom"? They built cities that no one lives in:



And

2) Consumer demand is outstripping food supplies?

Cities where no one lives.

Not enough food.

Does that sound like the makings of a strong economy?

2 comments:

  1. Hi Pasto.
    What's even more scary is the fact that China holds so much US debt.
    Honestly most call me a pessimist ,i consider myself a realist and to me there's only one way this can end .Total world wide collaps,survival of the fittest!

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  2. What does it matter, Will?

    They are going down.

    What are they going to do, send the repo man?

    Think about what you are saying and please tell me what it matters.

    Sheesh.

    You're a smart dude. Let's hear some analysis on this.

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