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Chinese Producer Prices Tumble For 34th Month In A Row, Worst 'Deflation' Since Oct 2009
For the 34th month in a row, Chinese Producer Prices (PPI) fell YoY (dropping 4.3%, missing expectations of a 3.8% deflation). This is the biggest YoY drop in prices since October 2009 led by a 9.9% plunge in fuel costs. Chinese Consumer Prices are also showing continued deceleration with a 0.8% rise YoY (missing expectations of a 1.0% rise YoY) - the weakest CPI low-flation since November 2009. Great news for the average Chinese person is that food prices rose at the slowest pace in years (and even better the cost of alcohol & tobacco fell YoY again).
Producer Price 'Deflation' continues for the 34th month...
As Consumer Price 'Lowflation' slides...
Of course, this will provide just enough "bad news is good news" headline fodder for the sell-side to once again demand the PBOC cut RRR again and save the world...
As Japan is now the only region in the world seeing rising forward inflation expectations...
Charts: Bloomberg
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huh, japan - it took a quad trillion to get er goin...
hmmmm.......its still not goin' in Japan......and China will spend 100 Quadrillion with the same results...
I can't decide if china is an ascendant superpower or fucked like everyone else.
Fucked like everyone else. Perhaps moreso as the opponent of the west in world war 3.
They think they are a superpower but they haven't had to prove it yet. and the way their market is going they'll never get a chance.
Not that I disagree with you...but which market is superpower-going these days?
They have the same monetary model we have on steroids so they will be hyperfucked. Their only repreive is that they know how to live a simple life so the adjustments may not be as severe for them.
The battle between Texas and Pennsylvania is going to be one for the Ages here.
"Oil versus gas."
Cowboys versus Steelers.
Pirates versus Rangers.
Truckers versus railroads.
Taylor Swift versus Willie Nelson
Moar bullish news from the world's largest economy.
Nothing a Pozzi operator hates worse, than a half filled Auditorium...
Cheaper booze and smokes to numb the pain. There's always a silver lining.
So few people understand how deflation works. It's not a ticket to lower prices and cheaper goods, it's a ticket to economic collapse.
http://www.globaldeflationnews.com/debt-and-deflation-theres-more-to-def...
As the short video shows, there is good deflation, occurring when money and credit are stable, technology and producer learning curves lower production prices. That is the deflation in America's Golden Age, the last quarter of the 19th Century.
Then there is bad deflation, occurring when there has been a big credit boom and boom in velocity of money. Much of the credit is tied up in 'white elephant' malinvestments. Of course, all loans must be repaid—by someone, somehow, someway. In this case deflation makes it harder for debtors to repay their loans because each dollar is more valuable.
Politically connected debtors attempt to make the government drag out the pain of debt liquidation. The longer it takes to liquidate the loans in bad investments, the greater the pain throughout the entire economy, because non-performing loans on the banks books reduce their ability to make new loans. The contraction in economic activity, as shown by record low money velocity, argue against success of new business ventures.
Eventually, the market overwhelms the government's efforts to protect the debtors' malinvestments and someone books the loan losses: either bank, debtor, or taxpayers via government largesse.
In a way, it's like war. Quickly prosecuted wars are more humane because civilian casualties are far lower than in long, drawn-out wars. Quickly writing off bad loans are also more humane because collateral damage to bystanders in the economy is greatly reduced because the damage is greatly contained.
The Panic of 1921 is known to very few. But the Great Stock Market Crash of '29 and the subsequent Great Depression, ending in 1945, is known to everyone. As are the Internet & Technology Stock Market Crash of 2001 and the Housing-related Stock Market Crash of 2008. The Panic of 1921 is, for all practical purposes ( FAPP), unknown because there was no government meddling. The Crash of '29, the Great Depression, the Market Crash of '01 & 08, and the Global Financial Crisis from 2008-? are all so well known because of the ineptitude of the governments efforts to return us to prosperity. Something that they are singularly ill-equipped, ill-trained and lacking the God-like intellects required to succeed at such a massively complex task.
"A man has to know his limitations."
What is so amazing, despite copious and ample, public evidence, politicians still cannot honestly recognize their own weaknesses.
Deflation? Why? The Big question is why?
Declining Energy prices less expensive to do produce or Declining Demand less demand for produces so less need for energy and therefore lower energy prices? It's like Weight loss; Dieting and Exercise well then great, undiagnosed Cancer well then not so great.