Chinese and British Inflation Rates Work Higher
It looks like the Chinese have yet to uncover measures that will engineer an orderly slowdown of their economy. A byproduct of the stimulus and the massive increase in liquidity is inflation. The yearly increased in the CPI was 4.9%, up from last month's 4.6% increase but not quite as big as had been anticipated. The PPI came in bigger than the guesses, a 6.6% y/y increase, higher than the expected 6.1% and the previous period's 5.9%.
Government bureaucrats seem to be the same, regardless of the country. The yearly increase in Chinese food prices has exceeded 10%, so to reduce the impact on the inflation numbers, the food percentage in the basket of consumer purchases was reduced by 2%, and the importance given to housing was increased by 4.22%. Will this sleight of hand fool the Chinese? The problem with food costs is that it is a lagging indicator
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