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China Forced To Deny It Will Experience HYPERinflation In 2011, As Russia Unexpectedly Hikes Interest Rates

Tyler Durden's picture


And now for this evening's stunner, via Dow Jones. "There won't be hyperinflation in China this year, the state-run China Securities Journal reported Tuesday, citing Yao Jingyuan, the chief economist of the National Bureau of Statistics. The abundant stocks of grains and main agricultural products in China are key factors in stabilizing consumer prices, the newspaper quoted Yao as saying. China's consumer price index rose 4.9% in January from a year earlier, picking up from December's 4.6%." So putting aside what official denial means about the validity of a story, not to mention this utterly bizzare and completely out of left field statement, China's best and only reason why it won't have hyperinflation is that it has "abundant stocks of grains and agricultural products."... We can, at best, hope that this has to be some early version of an April Fool's joke, or else things are truly far worse than anyone expected.

Also, just where does China put the threshold cut off on "hyper" - 10%? 20%? 50%? Is it at least safe to say that China may well experience mega, turbo, or nitrous inflation (and we generously put all three terms to the left of "hyper" on the X-axis)?

In the meantime, Russia, which will soon come out with comparable warnings, unexpectedly hiked interest rates by 0.25% to 8.00%:rest

The Russian Central Bank unexpectedly raised its key interest rate by 0.25 percent to 8 percent for the first time since the economic crisis over two years ago.

The Bank of Russia said in a statement that the rate hike, effective from Monday, was needed due to the high inflationary pressure and the expected rise of capital inflow into Russia as the world oil prices surge on the unrest in the Middle East.

“There are grounds for capital inflows into Russia due to higher oil prices,” the central bank said in a statement accompanying the decision.

By tightening its monetary policy, Russia is sending a strong signal that it views rising prices as a greater threat than slow economic growth.

Since the start of 2011, according to the Rosstat data, customer inflation in Russia reached 9.7 percent in a yearly term, mostly due to rising food prices. Earlier, in December 2010, central bank Chairman Sergey Ignatiev said monetary policy makers next year will focus on keeping inflation between 6 percent and 7 percent.

In addition to raising all of its rates by 0.25 percentage points, the central bank also tightened reserve requirements for liabilities to non-residents were raised by 100 basis points to 4.5 percent, and for other liabilities by 50 basis points to 3.5 percent. This should discourage inflows of speculative capital and a sign of the bank’s concern that a stronger ruble would hurt growth.

On Friday, Russia’s currency climbed 0.7 percent, hitting a 10-month high against the U.S. dollar.

Russia’s current bout of inflation was sparked by a summer drought that destroyed over one-third of its grain harvest last year and sent food prices soaring.

Although Russia has already scrapped food import duties and banned exports of grain, prices have continued to rise, throwing into doubt the central bank’s target of 6 percent to 7 percent inflation for 2011.

“It’s quite encouraging to see that they’re willing to adopt a quite unconventional … response,” David Oxley, an emerging markets economist with Capital Economics, said to Reuters.

Russia had responded with a deposit rate hike already from December 27, including increasing the one-week deposit rate to 3 percent from 2.75 percent, and reserve requirements for non-resident credit institutions to 3.5 percent from 2.5 percent in January, but this month’s moves stepped up the campaign.

“The most confusing thing about the central bank’s decision is that it followed the release of predominantly weak January macroeconomic indicators,” Alexander Morozov, chief economist at HSBC said to The Wall Street Journal.

Get used to many more such "confusing" decisions, as the Fed's policies force the developing world to stall their economies with preemptive tightening. And there are those who wonder why the currencies of these countries don't surge as a result, pushing the dollar lower.

h/t London Dude Trader and themos mitsos


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Tue, 03/01/2011 - 00:46 | 1006083 JW n FL
JW n FL's picture

I like China will be refusing to admit there is any hyper inflation at all, thusly hyper inflation will not be effecting me either in 2011... thank you for your support and no worries, the beatings will continue until moral improves markedly.

Tue, 03/01/2011 - 00:59 | 1006116 Bob Sponge
Bob Sponge's picture

The world powder keg is really heating up and we are only at QE2.

Tue, 03/01/2011 - 02:18 | 1006241 tellsometruth
tellsometruth's picture

well put...stunner of a state-ment


Tue, 03/01/2011 - 02:33 | 1006257 Michael
Michael's picture

Steroidal Inflation anyone?

Tue, 03/01/2011 - 03:43 | 1006316 Michael
Michael's picture

I uploaded a high quality copy of Alex Jones on The View.

Alex Jones Hijacks The View for Charlie Sheen

Tue, 03/01/2011 - 04:30 | 1006341 spdrdr
spdrdr's picture

What a fucking wanker........

Tue, 03/01/2011 - 04:45 | 1006347 asdasmos
asdasmos's picture

Jim Rogers on CNBC 02/27/11 (Part 1)

Jim Rogers on CNBC 02/27/11 (Part 2)

Tue, 03/01/2011 - 01:05 | 1006120 traderjoe
traderjoe's picture


Tue, 03/01/2011 - 01:04 | 1006126 traderjoe
traderjoe's picture

Not that I want to get in the middle of it, but do you think your personal troll will stop by tonite? There's been a few threads (including others) that have lately devolved into personal arguments...

Tue, 03/01/2011 - 01:09 | 1006139 JW n FL
JW n FL's picture

mine? if so mine is dead and gone. no worries, lets get back to the work of educating or bashing each others arguements to make them stronger / fun!

Tue, 03/01/2011 - 11:08 | 1006710 ft65
ft65's picture

Quoting JW n FL / GLP ^TrInIty^

mine? if so mine is dead and gone. no worries, lets get back to the work of educating or bashing each others arguements to make them stronger / fun!

Why don't you allow the same on your wo-wo forum, instead come here to ZH to bespoil the comments section. Why do you never educate or bash my comment here at ZH do you have something to hide? Are my posts invisible to the HB Gary MacDill software you use / test?

Tue, 03/01/2011 - 14:56 | 1008075 JW n FL
JW n FL's picture

Jason / Alex / whoever,


Quit fucking stalking me... so that you can keep pasting your website here in ZeroHedge... you are a bottom feeding group who cant pay for your corp docs to be filed... last ditch or not, you picked the wrong person to stalk. now fuck off.


James Edward Workman

Tue, 03/01/2011 - 02:52 | 1006247 Michael
Michael's picture

You called? What the hell is it with the comment counts on these threads being so low? Lets get this party started.

Extra Extra, read all about it;

"9/11 was Assisted by the Government".

You have to nudge the MSM and make them say, "9/11 was Assisted by the Government".

Use these exact words 10,000 times and the MSM will talk about it. Don't use the old phrase, "9/11 is an inside job". There is too much cognitive dissonance with that phrase.

Write lots of blog stories with this headline;

"9/11 was Assisted by the Government".

Tue, 03/01/2011 - 04:03 | 1006332 Xkwisetly Paneful
Xkwisetly Paneful's picture

and all the mindless government drones somehow pulled it off and kept quiet about it. First nomination for king of the moronistas.

Tue, 03/01/2011 - 06:37 | 1006387 MolotovCockhead
MolotovCockhead's picture

Building what?'s building7.

Tue, 03/01/2011 - 08:25 | 1006455 Alcoholic Nativ...
Alcoholic Native American's picture

They managed to commit war crimes in Iraq and get everybody and the MSM to shut up about it.  The two are very linked.

Remember the first time the WTC got bombed, it was government supervised, the underwear bomber ring a bell?

I understand the knee jerk protectionism of your country, but really, the U.S. has gone to shit since 9/11. Nobody is going to jail? Why? because no crimes were committed?  No, Financial crooks and war criminals are all that's left.

Tue, 03/01/2011 - 08:41 | 1006482 smlbizman
smlbizman's picture

i would just ask you to think of all the terroist attacks you can think of.  they all seem to be of  simple planning. now consider the complexity of the 911 plot. it does not seem to fit their m.o.  i do not think of a conspiracy, i dont even know who alex jones is, but from my own common sense it appears fishy.

Tue, 03/01/2011 - 09:12 | 1006547 Xkwisetly Paneful
Xkwisetly Paneful's picture

They can't deliver the mail or plow the streets properly but they assisted in the largest domestic attack on the continental USA right under our noses where people are on video at random 100times a day. In the country's most populous city of all places. 


If they went to all that trouble, why didn't they just plant WMDS in Iraq? Much simpler and they pinned the entire war on it. It must be because they had a bout of their conscience kicking in.



I really understand the self loathing having been indoctrinated in the same basic moonbat, whackjob educational institutions as the rest.  


Tue, 03/01/2011 - 09:16 | 1006585 JW n FL
JW n FL's picture
by Michael
on Tue, 03/01/2011 - 01:52


You called?


You are not a stalker, you are someone I talk too...

Tue, 03/01/2011 - 02:08 | 1006232 robertocarlos
robertocarlos's picture

I also like China.

Tue, 03/01/2011 - 08:50 | 1006508 Bobbyrib
Bobbyrib's picture

By increasing their Treausury holdings they seem to be trying to stick us with the unwanted inflation they are experiencing.

Tue, 03/01/2011 - 09:54 | 1006680 ft65
ft65's picture

Quoting JW nFL / GLP ^TrInIty^

I like China will be refusing to admit there is any hyper inflation at all, thusly hyper inflation will not be effecting me either in 2011... thank you for your support and no worries, the beatings will continue until moral improves markedly.

Yep, that sound par for the course with you. Explains why you so love to dish out the bans at your forum I can sleep at night knowing we are safe for another 10 months... "But what then oh enlightened one?"

Tue, 03/01/2011 - 09:59 | 1006699 swanpoint
swanpoint's picture

My (Chinese) neighbor here at work just got back from China; 50% food increase over the New Year holiday.

Tue, 03/01/2011 - 10:20 | 1006768 MiddleMeThis
MiddleMeThis's picture

Plastic Rice Baby!!!

Tue, 03/01/2011 - 00:50 | 1006092 holdbuysell
holdbuysell's picture

In the continuum of being increasingly more extreme, what is the word for "being one notch below hyper". Ultra?

Maybe that's what China means.

Whew, we can relax. It's only ultrainflation to be expected in China.

Tue, 03/01/2011 - 00:56 | 1006105 Spitzer
Spitzer's picture

Are any of you aware that China has to print RMB to buy dollars to peg the RMB ?

So the second that China stops printing RMB, inflation will stop in China and start in the US ?

Tue, 03/01/2011 - 01:03 | 1006124 DonutBoy
DonutBoy's picture

Yes - that's the Bernank's plan in a nutshell. They get massive inflation or they break the peg.

Tue, 03/01/2011 - 01:13 | 1006147 Spitzer
Spitzer's picture

haha, yeah and the act of breaking the peg automatically pushes the inflation on the US.

US dollar down, RMB up. And just in case you didnt know, you don't need a weak currency to be export competitive. Germany has higher wages then the US does yet it has trade surpluses with China.

Tue, 03/01/2011 - 01:18 | 1006163 DonutBoy
DonutBoy's picture

The Germans never hollowed out their industrial base, they have built and maintained brands which garner deserved world-wide respect for quality.  Thus they can keep higher wages.  The US cannot, we don't have that base or the rep.  We need the lower currency.

Tue, 03/01/2011 - 01:42 | 1006202 Spitzer
Spitzer's picture

A lower value currency is the unfortunate result of Fed policy. Unless you live outside the US, there is no reason to want a low dollar. Thats like wanting low wages. The dollar will have fallen even if there was no bailouts or stimulus. There is no reason to try and lower the value of the USD, the market will price it.


Tue, 03/01/2011 - 01:54 | 1006214 Dr. Porkchop
Dr. Porkchop's picture

Yes, they've been pushing the weak dollar concept here in Canada for ages... because it's 'good' for our exports. What they are really saying is, here, have a weak currency and higher priced imports for your troubles, oh, and here's NAFTA for good measure, that will be a net benefit to the middle class too.

I find that when things grate against your common sense, it's because something is wrong.

Tue, 03/01/2011 - 12:32 | 1007280 tellsometruth
tellsometruth's picture

i agree with you

Tue, 03/01/2011 - 09:38 | 1006619 Spalding_Smailes
Spalding_Smailes's picture


What the fuck are you talking about ... ? They are printing like mad in China ... M2 in U.S. up what, 2 % ....


By the end of January 2010, the balance of broad money supply (M2) in China was RMB 62.51 trillion ($9.15 trillion), a year-on-year increase of 25.98 percent but a decrease of 1.7 percent compared with the end of last year. Narrow money supply (M1) in China at the end of January stood at RMB 22.96 trillion ($3.36 trillion), indicating an increase of 38.96 percent year on year, while money in circulation (M0) was down by 0.79 percent year on year to RMB 4.08 trillion ($596.95 billion), with net cash flow in the month in question at RMB 251.2 billion, down by RMB 425.2 billion ($36.75 billion) year on year.

At the end of January, RMB loans of Chinese financial institutions stood at RMB 41.37 trillion ($6.05 trillion), a year-on-year increase of 29.31 percent, with the growth rate down by 2.43 percent compared with the end of 2009.

Domestic and foreign currency deposits at Chinese financial institutions increased by RMB 1.514 trillion ($221.51 billion) during the month of January. With a year-on-year increase of 26.77 percent, the domestic and foreign deposits stood at RMB 62.72 trillion ($9.18 trillion) at the end of January.

BEIJING (Dow Jones)--China's broadest measure of money supply, M2, is likely to rise by 16% this year, Gao Xiaoqiong, the head of a regional branch of the People's Bank of China, said in a commentary piece in the Financial News on Monday.

At the end of December, M2 was up 19.7% from a year earlier.

Gao, the head of a PBOC branch in Nanchang city, southern China's Jiangxi province, said in the article the shift in China's monetary policy stance to "prudent" from "moderately loose" will have an especially large impact on China's less-developed areas. The central bank should try to promote small-scale loans in rural areas and to poor individuals as well as loans to women starting businesses, he said.


Tue, 03/01/2011 - 07:36 | 1006412 Popo
Popo's picture

Yes, that is the Bernank plan.  Force China to raise rates by pushing inflation on them.  


Unfortunately,  Bernanke is a naive academic and believes that a stronger Chinese currency will magically manifest itself in a resurrection of American manufacturing and exports.   On this note he is hopelessly, tragically wrong.   Economists rely on animal spirits as a matter of religious belief -- but the US manufacturing base has been gutted and cannot be resurrected due to social and political obstructions which are not easily overcome in 10, 20 or even 30 years.  


The rise in Chinese rates will spell the beginning of the disastrous plunge in living standards which will be the most significant event in the American 21st century.  


Bernanke will scratch his bald head and wonder why our debauched currency isn't magically spawning industry, jobs and social order.  It worked on paper, afterall...



Tue, 03/01/2011 - 08:58 | 1006530 Bobbyrib
Bobbyrib's picture

Our manufacturing base can be resurrected, but corporations would have to make sacrifices.


As we all know labor is the only one who should be making sacrifices...

Tue, 03/01/2011 - 05:48 | 1006361 Mentaliusanything
Mentaliusanything's picture

In the end (and I mean it literally) I'm betting on 

mega, turbo, or nitrous inflation - NUCLEAR

NUCLEAR - the modern way to clean the stains left by Capitalism

Tue, 03/01/2011 - 00:52 | 1006094 Bolweevil
Bolweevil's picture

Hella inflation

Tue, 03/01/2011 - 00:53 | 1006097 Harmonious_Diss...
Harmonious_Dissonance's picture

Dude Trader?  By any chance does The Dude abide?

Tue, 03/01/2011 - 00:56 | 1006109 three chord sloth
three chord sloth's picture

Heh. I thought dude trading went away when they closed all the bath houses.

Tue, 03/01/2011 - 00:52 | 1006099 Spitzer
Spitzer's picture

China will have to hyperinflate to keep the dollar peg so in other words, China is just saying they will not be purchasing as much dollars.


Tue, 03/01/2011 - 00:54 | 1006101 xPat
xPat's picture

>Also, just where does China put the threshold cut off on "hyper" - 10%? 20%? 50%?


Assuming you are referring to annual inflation rates, none of the above even begin to approach hyperinflation. There are several definitions, but 50% per MONTH is probably the most common.


Tue, 03/01/2011 - 07:52 | 1006422 Withdrawn Sanction
Withdrawn Sanction's picture

There are several definitions, but 50% per MONTH is probably the most common.

True, there are several definitions, and 50% is the most widely cited.  It comes from Philip Cagan's work, but it is ultimately, an arbitrary threshold.  Perhaps "really fast" or "a lot" would be equally as accurate and useful.

In my view, the really interesting part of the left field Chinese comments is the staunch denial of an accusation not made.  As the old saying goes, "nothing is confirmed until it is officially denied."  

Tue, 03/01/2011 - 00:55 | 1006103 DonutBoy
DonutBoy's picture

Whoa mate!  Who asked you about hyper-inflation?  I predict a career move in Yao Jingyuan's immediate future.

The rest of you move along, these aren't the droids you're looking for.

Tue, 03/01/2011 - 00:58 | 1006115 TJWP
TJWP's picture

So first off all, China has so many people it stands to reason that if they do it they do it big. Secondly you didn't honestly think that China was going to allow Geithner and Bernanke to one up them. Over in China they do things BIG and authoritarian. 


Or perhaps they are simply pulling a Gadaffi - "deny till you die"

Tue, 03/01/2011 - 01:12 | 1006143 JW n FL
JW n FL's picture

Over in China they do things BIG and authoritarian. 


Or perhaps they are simply pulling a Gadaffi - "deny till you die"


++++++++++++++++++++++++++++++++++ InfiniTimmy and Beyond in Gold for Great Style and Delivery!

Tue, 03/01/2011 - 01:09 | 1006127 bob_dabolina
bob_dabolina's picture

I agree.

I am observing healthy inflation due to a robust global recovery. It is by nature that prices would rise in congruence with my observations.

Unemployment as measured by U3 remains lofty, however, the birth-death rate as well as people no longer caring to even find work should off-set this figure in the coming months. I expect a 0% unemployment figure by 2015 according to our models.

-Ben Bernanke.


Tue, 03/01/2011 - 02:39 | 1006260 Bob Sponge
Bob Sponge's picture

Yes, Ben. When the economy is not creating jobs, in 4 years many, many people will have given up on finding a job. Are you figuring on starvation and suicides increasing the death rate part of your models?

Tue, 03/01/2011 - 01:06 | 1006131 chump666
chump666's picture

China is the big danger now, they can't fudge hyperinflation. Tea prices are a good example as is rice..

Oil crunch coming for China.

Tue, 03/01/2011 - 01:08 | 1006141 reader2010
reader2010's picture

The price of pork is the ultimate gauge of inflation for the Chinks. I heard they had about 500 million pigs last year.

Tue, 03/01/2011 - 06:10 | 1006370 MsCreant
MsCreant's picture


Tue, 03/01/2011 - 07:39 | 1006416 Freebird
Freebird's picture

In armour?

Tue, 03/01/2011 - 09:16 | 1006588 JW n FL
JW n FL's picture

Chinks in Armor ='s "M61 7.62" in this house!!!

Tue, 03/01/2011 - 01:07 | 1006135 blunderdog
blunderdog's picture

I'd really feel much better if someone would announce that there'll be no hyper-inflation in the USA this year.

You know...just to cover the bases.

Tue, 03/01/2011 - 01:16 | 1006156 Spitzer
Spitzer's picture

could easily happen.

China will stop buying dollars and bernanke will not stop printing them

Tue, 03/01/2011 - 01:52 | 1006212 blunderdog
blunderdog's picture

Nah.  If you really game out the nature of that prediction, it just seems a bit too far to stretch.

Xmas 2011--could it "easily happen" that not a single merchant out there would accept $20 US for a fruitcake?

Note that I have about zero long-term faith in the dollar.  I just strive not to get ensnared in hyperbole.

Tue, 03/01/2011 - 11:24 | 1006969 snowball777
snowball777's picture

There'll be no hyper-inflation in the USA this year.

For that, you'd need a viable competing currency of which there are none, at the moment.

Tue, 03/01/2011 - 23:32 | 1010117 GoinFawr
GoinFawr's picture

Have you checked to see if your locally owned bakery proprietor will take an ounce of silver for a birthday cake lately?

Tue, 03/01/2011 - 01:13 | 1006146 Yen Cross
Yen Cross's picture

Russia is a corrupt non playing member of the New World Order (pun intended) Russia is the last Bastian of the Wild Wild west wanabes.

Tue, 03/01/2011 - 01:17 | 1006160 Oh regional Indian
Oh regional Indian's picture

Looks like Russia has their Vlockerski and China has their Vlocktujintao and India has their Vlockerama....

Hu's manning the farm in Ummerica?

That's Hu!


Tue, 03/01/2011 - 11:27 | 1006984 snowball777
snowball777's picture

And who will the the Volker of the Euwwww?

They seem to have scared off all the hawks.

Tue, 03/01/2011 - 01:18 | 1006164 Threeggg
Threeggg's picture

All I know is that Obama looks pissed !

Dont-he ?

Tue, 03/01/2011 - 01:21 | 1006169 Mad Max
Mad Max's picture

China rumored to be experiencing supercalifragilisticinflation, but at least they are safe from hyperinflation until at least 1/1/2012, at 12:01am local time.

Tue, 03/01/2011 - 01:26 | 1006175 Tense INDIAN
Tense INDIAN's picture



correct me if I am wrong 

Tue, 03/01/2011 - 01:31 | 1006184 PulauHantu29
PulauHantu29's picture

I watched a PBS program last week (filmed first week in Feb) where they interviewed a Shanghai realtor who said RE there is "rising at a rate of 8% per month."

PBS then went rural and interviewed farmers who said green peppers, for example, had risen 300% in half a year.

mmmm...inflation under cotnrol there?

Last time in 2008 when China had this problem they raised rates 8x and reserve req 10x before stabilizing the inflation.

Tue, 03/01/2011 - 01:35 | 1006191 gwar5
gwar5's picture

OMG, the Chinese are afraid of hoarding and a run on food stores. Nightmares of the Great Leap Forward and 40 Million starved to death. Yeah, those fears could cause a revolution pretty quick alright.  

How bad was it? Starving parents would swap children in the villages because they couldn't bear the thought of eating their own child. Serious. 

Not a good time to have that shit come up.


Tue, 03/01/2011 - 01:59 | 1006220 Dr. Porkchop
Dr. Porkchop's picture

Or just watch a doc on the Holodomor in Ukraine. Nasty stuff.

Tue, 03/01/2011 - 01:56 | 1006218 Dr. Porkchop
Dr. Porkchop's picture

What was the number one sign that the US was going to monetize the debt?




A: When they explicitly said that they wouldn't monetize the debt.

Tue, 03/01/2011 - 01:59 | 1006222 PulauHantu29
PulauHantu29's picture
"Prosecutors Office vows to crack down on food hoarding

TAIPEI -- The Taiwan High Prosecutors Office vowed yesterday to harshly crack down on anyone caught hoarding food staples as part of the government's efforts to stabilize food prices amid a string of price hikes following the Lunar New Year."

Is this the Fat Lady siniging I hear?


Tue, 03/01/2011 - 02:11 | 1006237 born2bmild
born2bmild's picture

News, AFP:


China's holdings of US debt larger than reported

WASHINGTON — China's holdings of US bonds reached $1.16 trillion at the end of December, almost $270 billion more than previously estimated, new data showed Monday.

Beijing, which has converted much of a huge trade surplus with the United States over the past two decades into buying up US treasuries and other securities, held 26.1 percent of the total of $4.44 trillion held by foreigners, the Treasury said.

The figures came as the US government recalculated its data on foreign holdings of US securities from June 2010.

Chinese-held Treasuries have fallen since hitting a high of $1.18 trillion in October, under the revised figures. Japan remained by far the second largest holder of US government debt, with $882 billion in December, around $1.3 billion less than original estimates.

Britain was third at $272.1 billion.

Tue, 03/01/2011 - 02:35 | 1006258 Scorpio69er
Scorpio69er's picture

Hmmm, I wonder how a Chinese-speaking person would pronounce "hyperinflation"...

Tue, 03/01/2011 - 04:43 | 1006345 StychoKiller
StychoKiller's picture

According to babelfish:


Tue, 03/01/2011 - 04:47 | 1006348 Overflow-admin
Overflow-admin's picture

Something like "Èxìng tonghuò péngzhàng"

Tue, 03/01/2011 - 11:30 | 1006997 snowball777
snowball777's picture


Tue, 03/01/2011 - 02:36 | 1006259 ebworthen
ebworthen's picture



There will be no inflation because we say so.

We also say that QE2 adn QE3 will complete this fantastic recovery in the world economy and put a chicken and cup of rice in each pot.

Now give us your PM's...


Tue, 03/01/2011 - 03:35 | 1006305 Reven
Reven's picture

If China hyperinflates, I will rejoice.  Fuck those mercantilistic, currency manipulating douchebags.

Tue, 03/01/2011 - 07:34 | 1006411 Freebird
Freebird's picture

Rev, you referring to the Fed?

Tue, 03/01/2011 - 03:38 | 1006310 10kby2k
10kby2k's picture

There is a bill in congress requiring  chinese to be spoken in all american schools by 2015.

Tue, 03/01/2011 - 03:51 | 1006321 slackrabbit
slackrabbit's picture

Its not inflation, its glorious price rises to celebrate the worker victory over the imperial capitalists.

This is then celebrated by the second part which perhaps is more worrying...people easing the abundant food stockpile inventories mentioned.....unless there are food supply problems there as well....

Tue, 03/01/2011 - 04:02 | 1006327 Xkwisetly Paneful
Xkwisetly Paneful's picture

Supposed to learn German in the 70's, Japanese in the 80's now Chinese.  They need a nation of psychologists to deal with the single child syndrome.


They're going to be exporting deflation forever and a day. Construction being 60% of the economy, they are already dramatically overbuilt but like buying US bonds they can't stop. No different with manufacturing.

Tue, 03/01/2011 - 04:54 | 1006351 Overflow-admin
Overflow-admin's picture

No, I'm sure there are some US corporations that can hold the manufacturing in China. Let's say... Apple for example, has lot of products pending for mass production in there. iPhone 5/5.1a/5.1b/6, iPad 2/2.1a/,  iRack, iRan (


But... what about demand? --> </sarc>

Tue, 03/01/2011 - 06:19 | 1006367 Xkwisetly Paneful
Xkwisetly Paneful's picture

If they close down production, the Chinese government will have those people producing something else shortly thereafter.

Obviously China price is even worse with falling demand. Although they hoard some stuff for a sunny day, was a story recently about football fields worth of refrigerators somewhere there. They are also dumpers at any price.


What has and is taking place with construction is sick, there is zero reason to believe that it is any different with manufacturing. They have shown regardless of supply/demand they will not stop.

as an aside although remotely tangentially related-getting to a point with construction where deconstructing homes/buildings around the globe particularly in the US to sell the raw mats is approaching the edge of the realm of financial sense.

Tue, 03/01/2011 - 04:34 | 1006342 Sokhmate
Sokhmate's picture

Mish must have had a hand in this.

Tue, 03/01/2011 - 04:53 | 1006349 PeaBird
PeaBird's picture

There won't be hyperinflation in China this year, the state-run China Securities Journal reported Tuesday

It is as if hyperinflation can be ordained by a bureaucrat to not happen or to happen as they please...

This attitude is central planning run amok aka megalomania.

Fuck there's some arrogant cunts out there...

Tue, 03/01/2011 - 05:18 | 1006355 savagegoose
savagegoose's picture

so china depegs, america ups interest rates real fast. american dollar will be back where

it was?

wonder what can go wrong with this plan?


Tue, 03/01/2011 - 06:30 | 1006381 robertocarlos
robertocarlos's picture

+1 It checks out.

Tue, 03/01/2011 - 09:21 | 1006598 JW n FL
JW n FL's picture

That is a sad, sad... no wait... think of the Bugatti? never mind its all good!

Thu, 03/03/2011 - 02:19 | 1014250 GoinFawr
GoinFawr's picture

So who makes Audi's then?

Tue, 03/01/2011 - 06:20 | 1006376 MsCreant
MsCreant's picture

I have a cure for inflation. Mark assets to Market.

Tue, 03/01/2011 - 07:15 | 1006402 MsCreant
MsCreant's picture

This is the lie that everyone is being forced to adjust themselves around. I think it is so bad the banks "can't" do it if they wanted to because they don't even know who owns what, never mind the true, hyper deflating value of mortgage based assets on an open market. And the derrivatives. 

I keep saying this is like being stuck in a bad marriage that you just keep adjusting and adjusting, trying to make it work when, fundamentally, everything is based on lies that multiply and you just can't do it any more.

The only answer is to default. Logistically, legally, logically, it is so fucked, we can't just "clean the nets," we have to cut them loose. 

Thu, 03/03/2011 - 16:33 | 1014246 GoinFawr
GoinFawr's picture

You're way too effing modest MsC. You need to post more often.

Fishing and bad marriage analogy in the same post, and nailed both of em.

Tue, 03/01/2011 - 11:31 | 1007010 snowball777
snowball777's picture

+1 (-1/0)

Thu, 03/03/2011 - 01:15 | 1014140 MsCreant
MsCreant's picture

Beautiful! And fucked. Better than Haiku.

Tue, 03/01/2011 - 06:37 | 1006386 papaswamp
papaswamp's picture

hyperinflation? isn't that when the currency becomes worthless vs shortage of commodities? If they want to avoid that, they will have to de-peg from the dollar.

Tue, 03/01/2011 - 06:47 | 1006391 Itsalie
Itsalie's picture

Whether china depeg or not they will still get hyperinflation because the Fed will not raise rates even if there is hyperinflation - see what the BoE is doing now? They might make a token raise to make people believe they are serious, but the specs will realize the CBs' "hot air" soon enuf and bid up commodities further, producers will hoard more, charge higher prices. Specs will bid up real estate in sydney another 100%.

There is only one certainty: the Fed needs to print thru QE3/4/5/6... because 1) to pay for american fiscal blackhole of $1.5tr a year ad infinitum, and 2) US banks' mountain of interest rates derivatives positions will explode and kill the Fed's masters if ever the Fed raises rates.

So depegging doesn't solve china's hyperinflation problem, the Fed has won, it knows China will not depeg and continue to send cheap iphones 4/5/6/7 to american consumers; it knows US' real estate prices will keep falling so core CPI will be well anchored even if headline is above 10%. But its a pyrrhic victory because the US will explode a-la Libya soon after.

The world will just use the USD printed by Ben to exchange for more commodities. Eventually the 40m americans on food stamps will grow to 100m; then Libya would be a safe haven for americans.


Tue, 03/01/2011 - 08:02 | 1006428 Xkwisetly Paneful
Xkwisetly Paneful's picture

What's going to happen when the single child policy is forced to support the aging population? 

Tue, 03/01/2011 - 08:26 | 1006459 Northeaster
Northeaster's picture

Regardless of what happens over there, Mish makes a compelling argument as to why The United States will not lose Reserve Currency status (i.e. no hyper here):

Tue, 03/01/2011 - 08:38 | 1006476 Lone Mad Minute...
Lone Mad Minute Medic's picture

As long as Russia and China raise interest rates, it keeps the pressure off the dollar and gives the Bernank more playing time.

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