Zero Hedge neatly encapsulates what it means:
The consensus expectation for Chinese CPI was 5.4%. Zero Hedge’s expectation based on just announced manipulated CPI data was 4.9%. Guess who was correct… In the meantime, Chinese food prices are not increasing by 5% every ten days, or over 400% annualized. Or at least, they are not doing so on rice (most likely fake) paper.
Earlier, Zero Hedge noted that China announced a change in the way China’s CPI is calculated – greatly reducing the input of food prices in to Chinese inflation. This done because of the fact that China’s food prices are increasing at an astronomical rate. China’s economy is massively overheated – made that way by a round of money printing and easy credit which would make even Ben Bernanke blush (not that he’d actually refuse to do it – he’d just blush while he did). Whatever you do, don’t believe whatever numbers you see out of China – they are walking on the knife’s edge of economic collapse and are determined to hide it…and hope that some how, some way, the global economy really does recover before the piper had to be paid.
The bad news for us is that there is no indication that Uncle Ben will refuse to send us in to this kind of inflation. There is nothing be said or done, that is, which tells us that the latest round of “quantitative easing” (ie, money printing) is the last…that when this bag of fake money runs out, Bernanke won’t just print up another one. And, so, dear Americans, we are at risk of this kind of inflation – not that it definitely will happen (in the United States, there are still plenty of downward pressures on prices), but that it is a real risk.
Maybe we really should all invest in canned goods and shotguns?
Blogs For Victory 