China: Big Inflation Trouble


The Chinese market played up-n-down last night, but the news was their inflation data….

BEIJING, Nov 11 (Reuters) – China’s headline inflation rose to a 25-month high of 4.4 percent in the year to October from 3.6 percent in September, the National Bureau of Statistics (NBS)
said on Thursday.

Yeah, right.  October’s food prices were up 1.1%.  And the PPI was up 0.7%, which is over 8% annualized.

And this assumes you believe the Chinese data.  There various anecdotal reports that some prices are literally changing during a given day, which sounds rather more like Zimbabwe or Weimar.

One such victim of inflation is Liang from Guangzhou who has to cook for a family of six. Just last year, her family could eat heartily for 1,200 yuan (US$180) a month. This year she needs to spend 2,200 yuan (US$330) per month to maintain the same quality of meals.

10% eh?  Looks more like damn close to 100%.  The Chinese government would never lie, right?  Just like ours never lies……

“Take cooking oil for example, we get three or four notices a day to increase the price,” the staffer said to Hong Kong’s Apple Daily.

Three or four price increases….. a day?!

This, of course, is being caused by the insane credit issuance in China – and money-printing over here.

Will China “successfully” manage this problem?  Probably not.  That ought to play hell with those Chinese who are still trying to make things work in the agricultural part of the nation – which is a hell of a lot of their population.

The start of inflation always feels good.  China has had a few years now of the “good feel” part, where everyone seems to be doing more-or-less ok.  Now we’re getting into the bad part, where prices spiral up and out of sight faster than you can possibly keep up, and people start to be forced down the economic ladder by the economic slippage and impact.

Hope you’re ready folks – the Chinese will slam the door on this one way or the other – either voluntarily or when their middle and lower classes get trashed and there’s a literal revolt.

Discussion (registration required to post)