Must Read: Standard Chartered Issues The Definitive Report On Global Inflation And Its Miscontents

Tyler Durden's picture

Every now and then, Standard Chartered has a knack for coming up with that one report that is miles ahead of the competition and promptly becomes the definitive guidebook for the industry. Its most recent one: "Inflation: illusionary, inflammatory" is arguably one of the most detailed and comprehensive reports to come out from an institutional entity in a long time, dealing with the ever so sensitive topic of, you guessed it, inflation. And while it is guaranteed that the Fed will read neither this report, nor today's earlier announcement that food prices hit another all time high in January, we urge all readers to at least familiarize themselves with the contents herein. In addition to providing a case by case geographic atlas of which the next riskiest Tunisia-like countries are, the report includes a unifying thematic overview that explains not only why the global liquidity glut is long overdue to be pulled back, but what the next (and last) steps available to central bankers are before a wave of global unrest undoes 100 years of failed Federal Reserve policies. An absolute must read.

The key points in the report:

  • We see three broad themes over the coming months: (1) a burst of strong US growth near-term followed by renewed disappointment; (2) periodic waves of concern over European debt as austerity bites; and (3) rising inflation in emerging economies that threatens to bring sharp monetary tightening and socio-political instability.
  • Of these three themes, rising inflation in the emerging markets (EM) - especially countries in the Middle East and North Africa - complicated by political and demographic challenges, could risk inflaming socio-political tensions and destabilising growth.
  • Even in Asia, where fundamentals are strong and consumer price inflation should be contained below 2008 highs, the risk is that governments may act too late – or worse, mis-diagnose and make the situation worse. Among those running higher risks are Vietnam, China, South Korea, Indonesia and the Philippines.

The report conviently lists the types of countries that will suffer the most:

  1. Economies with large food and energy components in their consumer price baskets, such as the Philippines, China, India, Indonesia and Vietnam
  2. Those that suffered less in the Great Recession or rebounded strongly afterwards, and therefore have small or even negative output gaps and little spare capacity to buffer growing demand. In addition to the five countries mentioned above, which all escaped recession during the crisis, Singapore and South Korea – both of which enjoyed quick and sharp recoveries – are high on the list.
  3. Countries whose central banks are slow or late to act – such as Indonesia and the Philippines, where policy rates are still at their post-crisis lows – are running an increasing risk of falling behind the curve, or at least of being perceived that way.
  4. Governments that focus on addressing the symptoms rather than the sources of their problems, or put emphasis on the wrong places.

Our advice: call your broker tomorrow, and load up on as much CDS as you can for each and every liquid name that conforms to these criteria.

And most notably, why non-core really is core, especially in Asia:

  • An obvious source of the recent acceleration in CPI inflation is higher food and energy prices, driven partly by  improving demand amid the global recovery and partly by supply disruptions due to poor weather. While the West treats food and energy prices as ‘non-core’ given their volatile nature and relatively small weightings in consumer baskets, for Asian consumers, a much larger 30-55% share of expenditure goes towards food and energy. Non-core inflation in the West is core inflation in Asia. It is therefore risky to focus too much on conventional ‘core’ inflation as the yardstick for policy action

In other words, when Bernanke is waving his hands in the air screaming "non-core" like a delirious imbecile, while Asia is burning, it really won't help anyone...

Full report.


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celticgold's picture

the first with nuttin

Michael's picture

I just thank God the United States is virtually bankrupt at this point in time.

Otherwise, our government would be interfering in the Egyptian revolution in ways unimaginable.

Jazeera English: Live Stream

TBT or not TBT's picture

God forbid our president should merely talk about freedom though, apropos of protestors in, say, Iran.

creviceCaress's picture


yo in

....uuhhh  theyre not  ?

rocker's picture

It's O.K. We can't go bankrupt. We have a printing machine.  Yup.

Michael's picture

I knew I could count on Chumbawamba. Good comments all.

Twindrives's picture

Benocide bitches.

gloomboomdoom's picture

comments like this make me nervous. Where is Tim Geithner?

Why does it take a collapsing government in Egypt to see Hillary Clinton?

Why did Bill campaign against Rand Paul?

What is this about?

chumbawamba's picture

Where is Tim Geithner?

Right now?  Probably sleeping.  Or masturbating.  Or doing his taxes on TurboTax.

Why does it take a collapsing government in Egypt to see Hillary Clinton?

Because she's an obnoxious whore and nobody likes her and they try to roll her out only when absolutely necessary.  That being said, I submit she adds nothing to the equation, and in fact she detracts from the situation by being such a horrid cunt.  Her smugness alone adds points to the interest we pay on our national debt.  I'd punch her in the balls if I didn't think she'd enjoy it.

Why did Bill campaign against Rand Paul?

Because he's a stupid Democrat and Rand Paul was running against a Democrat.  If that is not obvious to you then you must be a teenager who does not really understand American politics.  Or some dumb foreigner.

What is this about?

That is a really good question.  Speaking of, why do you have so many of them?

Whatever, I hope I was of service to you.

I am Chumbawamba.

ColonelCooper's picture

"Because she's an obnoxious whore and nobody likes her and they try to roll her out only when absolutely necessary.  That being said, I submit she adds nothing to the equation, and in fact she detracts from the situation by being such a horrid cunt.  Her smugness alone adds points to the interest we pay on our national debt.  I'd punch her in the balls if I didn't think she'd enjoy it."

TD ought to give you contributorship.  A front page by-line with daily analysis of current events.


johnQpublic's picture

excellent analysis

"horrid cunt"

cuts to the chase

nuff said

Blankman's picture

"I'd punch her in the balls if I didn't think she'd enjoy it."


Thanks Chumba.  That line livened up my morning!!!

savagegoose's picture

cuz she dont like getting out much after coming under sniper fire at a sarejevo airport.


well, she was at an air port and there where snipers.

umm they where our own snipers, but never let facts get in the way of a good spin

Al Gorerhythm's picture

Obama and Hillary slipping a Gerbil up Mubarak's ass. Mubarak is getting from the US what Mubarak gave to Egyptians. Hopefully the Egyptians will treat him in kind with the insertion of a camel.

4xaddict's picture

he's got his 76.4 tonnes of the shiney sweet stuff and no inclination to return. Mubarak isn't the one with the gerbil problems, it's his extended family/connections who didn't get out.

TruthInSunshine's picture

I have not read this yet, but will now.

Slightly off topic for those repositing what might be too much faith, by miles, in ChairShitStain Bernanke -

The 100% confident Ben Bernanke and his amazing track record:

Bernanke speaking on October 27, 2005: There's No Housing Bubble to Go Bust -


topcallingtroll's picture

He had to say that. Any public official who made such a statement and followed through on it would have been blamed.for the bust to follow. Now that we have experienced this future fed chairmen will feel more free out bubbles, except the current bubbles that are necessary to get the rebalance over with. Obviously he cant admit that either in public.

TruthInSunshine's picture

I don't follow your logic.

He couldn't have said "I'm not sure," or that "It's my opinion that housing is frothy?"

He had to say that there was definitively no bubble in housing?

Why, again, do you suggest this?

JonNadler's picture

from the article


But if Bernanke is confirmed as Fed chief, and if the housing market slows more than he expects, he would be unlikely to use the central bank's power over short-term interest rates to prop up falling housing prices for the sake of individual homeowners, according to comments he has made in numerous speeches and statements in academic papers.



blindfaith's picture

I have not read this yet, but will now



How can you comment on anything if you have not read it???  What? just to jump in front of someone who has read it and does have something to say, just to post what you want ???


As for the article...commodity shortages be it because of scarcity or affordability leads to war...plain and simple and someone wants this to go around the world.  The one time bomb the articles doesn't mention is Packistan, which has all the problems and nuclear bombs too.


Muir's picture

Thank you.


Off to bed but it does seem like a worthwhile read from what I did read.

plocequ1's picture

Its getting late. I will read this tomorrow after my breakfast, Morning dump and POMO ritual. Goodnite

I think I need to buy a gun's picture

The fast money team on Cnbc recommends Mens Wearhouse because the suits are almost all polyester there and not cotton. The desperation grows......

Cursive's picture

@ I think  I need ...

If Mens Wearhouse is the future of fashion, I almost don't care about "winning the future" (h/t Obama/Newt) anymore.  Seriously, the.ben.bernank has created a world where no body wins, not even the winners.

ColonelCooper's picture

But they say you won't believe how good you'll look.

Snidley Whipsnae's picture

Plastic clothes suck!

In addition, they are hot in summer and cold in winter.

...I suppose polyester leisure suits and disco is on the way back?

4xaddict's picture

CNBC are so %$#&ing stupid. Any half decent suit is made from wool.

As you say, w[hy]tf would anyone buy a polyester suit short of making an appearance before a judge.


Yen Cross's picture

GBP Halifax might be a slight mover. Here comes the ACB rinse wash. Oh wait it'sFriday risk off. And eur and gbp got hammered. Sorry

BigDuke6's picture

I looked up Ben Shalom Bernanke on wilkipedia just now.

The silver bowl cut and neatly trimmed fuzziness, the steely gaze and benevolent air.

No wonder Wall St love him.

slewie the pi-rat's picture

BigDuke6:  this IS Command Sp5 slewie:

hilary got back to me;  we're not goin surfin.

apparently, the pirates are ALREADY organized.  by china, via the european union, and certain insurance firms.  she did want to thank us for our shitheadness;  she had not been aware of the situ being organized b4 our inquiry.

she didn't know what USARV was.  i can personally assure you she will never have THAT question, again.

nice to recon a bit w/you, 6. thirty years+ is a heluva long time. make sure you use plenty of sunscreen and never lose the hat.  although you guys will always be a bunch of pussies to me, i just happened to be in the parrot's beak, drinkin and smokin with the local macv's, when you ladies went into cambooja, and fyi, i was VERY impressed that morning.  just serendipity, i guess...never seen anything like it!  one horizon to the other, nothin but hueys, cobras, loch's, skyhooks...the ground started shaking about 0430 and i thought the hooch was comin' down around my ears, if you copy.

good evening, sir! and that comes with a snappy salute from this em.

fly air america!

slewie out.

BigDuke6's picture

Was up the Nong river, Slewie ma man.

Past the bridge at Dow-Long. Lotta smoke up there from the buds.

Gave me a rash and a powerful hunger. 

We'll get that surf - but blackhawk down is done.

i'll see you in Thailand!!


slewie the pi-rat's picture


really?  i must be getting tired, or old, or both, but it was 40 years, 6.

i can imagine you were starved!  do you miss the jelly on yer morning toast?

ill bet the rash wasn't 1/2 as bad the the one you got in bangkok!

seeya on the funway!

CSp5 slewie.

BigDuke6's picture

Rash slewie? its never gone... but gone crusty green... like Yoda's buttcrack now...

i hope everyone here took my advice not to go short AUD.  Long AUD and ride the commodity super cyclone.

The winds went by and the march into march continues.

i was crouching in the jungle... getting stronger... while the chinaman drinks Lagavulin scotch in his empty apartment block, smashing mirrors and getting weaker....

Stay frosty.

hangemhigh's picture

TO:  slewie the pi-rat
on Fri, 02/04/2011 - 05:21

"apparently, the pirates are ALREADY organized.  by china, via the european union, and certain insurance firms."


slewie, is this reliable info??    if so, what can you say about your sources??  does the idf have a piece of the deal??

very bad sign if the pla/euro's have secured that surfing spot................. 

Yen Cross's picture

That beautiful BLU chart sould be converted in Green. Thanks for the art.

Yen Cross's picture

Infinity was my thought.

RockyRacoon's picture

Look at that population age spread for Egypt (page 8).  Similar young people (unemployed males) trends to follow in Egypt's tumultuous footsteps.

Yen Cross's picture

Good point. I got this shed that racoons populated. Hey I just let um do their thing. They leave me alone

Yen Cross's picture

It really is the young Females you need to worry about. As cute as they are. ??????

topcallingtroll's picture

One man's core is another man's noncore. This is why we win the final round of beggar thy neighbor. We let them all win by default the last few rounds, but now the usa has decided to enter the game and shake off all those pesky parasites and their unofficial and official unfair pegs as well as their soft peg like "targets" these countries need to conduct an independent monetary policy that fits their circumstances and quit.copying the fed move for move because they dont have enough chips to play this next round. They will either conduct monetary policy befitting their.circumstances or they will go through a catastrophe and end up repegging anyway. Sure some people think it was great to get all this subsidy from the third world, but they all planned to revalue after they stole enough of our service and industrial base, and then charge us out the wazoo. No way should we let them complete their strategy. They need to compete fairly./p>

KickIce's picture

PMs flat with all the global unrest?  Can the banks game the system for another year?  Can we dodge a major political event with all the unrest in the ME?

US consumer is tapped out and the BDI illustrates this.

Big key for US is fuel costs, if they increase as expected consumer sentiment will tank.  Food obviously will be a concern for many.  How many more will be added to the government payroll?  Cloward-Pivan(sp) anybody?

Residential and commercial real estate.

One of these days somebody's going to flinch and the rules are going to change.

RoRoTrader's picture

The 3 broad themes; Goldilocks........not too hot, not too cold, just about right. McKinsey

gloomboomdoom's picture

^^^The squid is getting nervious! Audit the FED!

slewie the pi-rat's picture

sweetheart, this intel is 17 mo. old, ok?

the squid is GS:  goldman sachs.

the FED is the Creature form Jeckyll Is.

read the article;  try the quiz, below, if you like.

and, yes, let's get the forensic accountants to check out what's under those 13 skirts.

ron's a gyno; trust him.

anonnn's picture

OT Sybil Edmonds direct knowledge of"Kamkaze Pilots" pre-911; stunning   

chumbawamba's picture

Now THAT'S must read.

And someone junked you.  That is so awesome.  If I wasn't Mormon I'd just touch myself.

I am Chumbawamba.

creviceCaress's picture



hey chumba, chu got the special underwear too?