Kiss Hopes Of Chinese Easing Goodbye: January Inflation In China Soars To Highest Since October

Tyler Durden's picture

Yesterday when we discussed the surprising non-cut in the Australia cash rate, we asked "is China re-exporting the lagging US inflation it imported over 2011? " and said that "It means that Chinese inflation continues to be far higher than what is represented... and wonder: did the RBA just catch the PBOC lying about its subdued inflation?" Lastly, we concluded: "Furthermore, the PBOC did 26 billion yuan in repos, meaning it is set to conduct a net liquidity withdrawal for this week according to Credit Agricole. Withdrawing liquidity when the market expects RRR cuts?" Sure enough, as usually happens when assuming sentiment manipulation by a centrally planned powerhouse such as the US, and in far lesser degree these days, China, we were right. The news just out of China is that January inflation soared far beyond expectations, with CPI printing at 4.5% Y/Y, compared to estimates of a decline to 4% from December's 4.1%. This was the highest inflation since October. We will simply repeat our conclusion from yesterday, which while speculation then is now confirmed: "Chinese easing is a long way off... and in a market defined solely by hopes for central bank intervention this is not good." Practically, this means that the PBOC just told the world that no easing will come from China in a long time, and that the Fed and the ECB are alone in reliquifying the market. It also means that one can kiss the Chinese growth dynamo story goodbye, and once the US finally recouples with the rest of the world, the only hope will be a new announcement of QE in March so it hits its maximum efficiency in time for Obama's reelection campaign.

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Eireann go Brach's picture

Who Flung Dung at Lawrence Yun?

Mr Lennon Hendrix's picture

Ben Bernanke and Keynesian policy.

Stoploss's picture

Aaaaaannnd gold reverses it's .8% decline. 

Mr Lennon Hendrix's picture

Platinum's strength today is a definate tell.  Look for the PM complex to ride out any volatility better than any other asset.

I write that because this system is (obviously) due for a large dose of volatility.

Michael's picture

And as the Chinese housing bubble goes Super Nova, they are still struggling with inflation just like the USA.


old naughty's picture

NO. China's is higher and higher still, thanks to Barnank "export" policy.

Except that usSa isn't well neither, also thanks to his "no-employment" policy.

His job is secure because he is handling both of his tasks well.

To whom it may concern?

Future Tense's picture

China is going to be easing to compensate for the rise in their currency against the euro, their largest trading partner. Bernanke will counter with QE3 to counter China's move and the coming LTRO easing.  It is a race to the bottom.  Great video from RT today interviewing Jim Rickards who wrote the book on currency wars:

SmoothCoolSmoke's picture

Since the Chinks make up their econ data to suit their needs, I take this CPI figure as a clear message to Bernake: STOP THE PRESSES.

Dr. Engali's picture

I don't think it's just the "Chinks" who make up their data to suit their needs. They are pretty good at reverse engineering and they have had a lot of lessons from the U.S.

oldman's picture

How can a redneck get his racism out the way enough to think.
You're a good guy, but you're asking a lot of a tiny brain

matrix2012's picture

In order to deal CORRECTLY with those DIABOLIC BANKSTERS one must resort to mafia ways!!! Any means are acceptable.

Remember that you're dealing with the CENTURY-OLD extremely wicked SOCIOPATHS!!!

oldman's picture

Matrix, Pleeese
Go back to alex jones or cnn or fox or wherever you came from

We have enough hyperbole here already
In fact, you really could make a difference, if you want, by some collaboration with Occupy.
We're just a bunch of old whiners and rednecks----we're not serious about CHANGING ANYTHING
Good luck to you in any event om

matrix2012's picture

take it easy oldman, i do mean that in dealing with TheOligarchs who control the NY and TheCity of London for the last two centuries (at least), one needs not to play gentleman, ANY means, yes ANY means, can be used to beat them!!! you don't play nice with those dangerous criminals!!!

Non Passaran's picture

Fair enough, just stop harassing us here with your bolded uppercaps. If you want anyone to pay any attention to your posts, that is.

lolmao500's picture

And kiss any hopes of JUSTICE goodbye...

A multistate settlement with five large U.S. banks over foreclosure practices would include as much as $17 billion in mortgage debt forgiveness and loan modifications and take three years to complete, according to a letter describing the deal.

The draft letter to stakeholders from state attorneys general outlines an agreement among large mortgage servicers, states and the Department of Justice, which are continuing talks to finalize the proposal.

pashley1411's picture

Its not like the good ole days, where the king sells a monopoly in salt, or some other essential commodity, to raise revenue.   We're too cool for that.   Moden states auction off the legal system.

pods's picture

Yep, no justice for the small people.

And they wonder why nobody will shed a tear when they are all strung up from light poles?

There is no more criminal justice when dealing with corporations, only civil retribution.  Only a cost of doing business.

If I were to go into court with a forged document, I would be catching for Bubba pronto in a prison cell.  Banks, well, a fine and some more regulations that will "stop this from happening again."

Just one big group, a big fucking club if you will, and we ain't in it!


Threeggg's picture

This Robo-signing "Bullshit" is a proxy to get all the Banks in possession of clean titles and paperwork regarding the MERS (Mortgage Electronic Registration System)  mess...........................They wan't clear title so that they can foreclose without having someone ask for the "Lost" deed that they don't have ! This foreclosure phase will be spread out over time so that the "Mark to Myth" balance sheets can shed the deadbeats slowly and write off the losses, now that they have frontrun them (losses) and been reimbursed with taxpayer bailouts.

How many banks (JPM, BAC, Waumu and all the others) will be paying taxes for the next 100 years with all the loss carry forwards ?

Answer: None !

pods's picture

The media arm of our corporate government focused on the robosigning aspect in order to minimize the blowback from people learning the truth about how bad they got fucked.  I heard in a couple of instances that some loans were put into multiple MBSs, and that none of the correct (legal) procedures were followed either for the holder to foreclose, or the buyer of the MBS to receive a tax benefit due the the REMIC being corrupted and loans being put into the conduit that were blank.

Just by using the term Robosigning they were able to condense things down to something simple that most amerikans could dismiss, instead of actually showing how bad things really were.

And with this, the government now has plausible deniability because the SOL is going to run out on prosecuting these fucks so the only avenue left is civil penalty, which is exactly what everyone wanted from the get go.  So they can play big enforcer while they wait for the SOL to run out, then blame the banks after people find out that all the DA's were in on the deal.  The DA's will say their hands are tied, they dealt in good faith with the banks, but the SOL ran out and civil fine is the only thing left.

Eric "place" Holder's main job is to sit on all of this until it is safe for his masters.  

Fucking crooks, every last one of them.


Dr. Engali's picture


"And they wonder why nobody will shed a tear when they are all strung up from light poles?"


As much as I agree with you on your other points I just don't see this one happening. The sheeple will take this screwing too and go on about their day.

pods's picture

To be honest, neither do it. I guess you could call it a wish?

Where did I put that Hopium pipe.................

Al Gorerhythm's picture

They don't even know their gaping orifices are being violated. Foreplay was; Bend over.

No, not even that level of seduction was pretended; they saw the body and went to work.

oldman's picture

I agree, but I have a question for for because I've been out of touch for a couple of months.
What are the dudes here doing and/or saying about Occupy? I haven't seen as much comment about these non-sheeple as I have about the rest of us.
Is the consensus at ZH still as negative towards the only people in the street as it was before xmas?

Thanks om

Non Passaran's picture

Personally I think OWS a good thing, but the clueless extremists (communists and fascists) took over.

oldman's picture

non pasaron
who is left to talk to if we eliminate communists and fascists?
I know that 'it will all work out in the end', but I might not be here for the end----and it is illegal to be an anarchist
I guess I'll just have to continue pretending it is just a cartoon or completely cleanse myself of the human context of reality---it really is quite a narrow piece of the universe---

thanks for your comment om

pashley1411's picture

Chinese were the international equivalent of the "1%"; the sugar daddy who was going to pay the bills.  Oh well.


Let me be the first one to jump onto the "invaders from Alpha Centauri" will-save-us bandwagon.

Bunga Bunga's picture

They only have to dig out one of the old script books from the 60s.


Wm the Shrubber's picture

Doesn't matter.  Greeks/EU/IMF will announce a deal (regardless of merit or lack thereof).  Market will cheer.  Next wave LTRO will hit on February 29.  Market will cheer.  Fed will answer with QE3 to hold down value of dollar in support of our "export led recovery".  Market will cheer.  Obama will get reelected.  In 2013, we are all likely to cry!

fonzannoon's picture

Asia started selling off pretty good when this hit. Seems like it already cut those losses in half.

Randall Cabot's picture

US futures well of their lows too.

fonzannoon's picture

Ah the holidays distorted the data.


Bunga Bunga's picture

No, holidays already caused the BDI to collapse.

Uber Vandal's picture

The Baltic Dry Index is off of its Friday, Feb 3, 2012 low of 647, today is at 676.

As I have posted a couple of times already, if this plays out like it did in 2008/2009, there should be a large "correction" coming around May 3, 2012.

Randall Cabot's picture

They need to get with the program with some seasonal adjustments.

Cunning Lingers's picture

Their inflation was low until IMF asked them to contribute money.

fonzannoon's picture

They don't need excuses. I am surprised the don't just tell the IMF to fk off already.

JW n FL's picture



one can kiss the Chinese growth dynamo story goodbye, and once the US finally recouples with the rest of the world, the only hope will be a new announcement of QE in March so it hits its maximum efficiency in time for Obama's reelection campaign.

Even at ZeroHedge we dont discuss the Greek Default.. coming at the latest possible date.. in March.

QE will only be part of the World! Wide!! Bailout!!!


I am going to paint one of those.. The End is NEAR!! signs!! and walk around with it! telling people to repent that their time has come!! or something like that!

Bunga Bunga's picture

As long as there is no deal they can kick the can down the road. Rally!

Cabreado's picture

With such differences in culture, a smattering of xenophobia, growing fear...

perhaps still we are starting to recognize the same behavior everywhere, on the part of a leadership that does not lead anywhere but into corners.

When the Outliers finally succeed in infesting the very psyche of a society, it is time Accept that something's gone wrong, and there are no palatable solutions.

The malignantly Self-Absorbed have, collectively and finally, mucked it up beyond repair.

Now there will be a Redefinition of the Problem, because nothing stands still, and that is all that's left to do. 

Beware the Narcissist, and Damn them all.

distopiandreamboy's picture

That's gone make a huge dent in American manufacuring

fonzannoon's picture

Asia is shaking off this news like a wet dog. It's going to rip higher. Now drink your bacon milkshake and move on.

nmewn's picture

Mmm, bacon milk shake.

Only in, America!

lizzy36's picture

Everything is priced in now.

Until it isn't.

When the music stops, there will be NO chairs left.

mayhem_korner's picture



Well, at least U.S. will be able to maintain its inflation exports.

JPM Hater001's picture

Dat's a wong number...

Sorry, I had too.

disabledvet's picture

and thus "commodities will remain priced in dollars forever." China doesn't need another empty city. It needs FOOD. The USA can produce as much as they need...for a dolares. if February is any indication this year could be the biggest production year in agriculture in the history of the US. do we no have a 12 month growing season? very odd this loss of both winter and cloud cover. i can forsee serious drought concerns however on the Eastern seaboard, the South and (hopefully not) Texas and of course the desert South West. When i see no less than the Weather Channel (let alone the local guy) missing temperature gradiants by 20 degrees i really start to wonder if this is being done intentionally (lest people not worry enough.) Will the Mississippi soon become but a trickle? FOODSHED BITCHEZ!

pine_marten's picture

Much of the bread basket is in a drought.  We have had almost no snow this winter so it is growing worse.  If the jet stream stays to the North into spring we will be in serious trouble.  Soil moisture is low from Texas into Minnesota. 

boogerbently's picture

OUR printing weakens THEIR investment.

None of the countries WITH financial discipline have any intention of bailing out the "weak links."

fonzannoon's picture

Anyone see the Canadian bonds issued in US dollars? What was that about?