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Raining On Chinese Prices

By |2018-10-16T16:36:51-04:00October 16th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was for a time a somewhat curious dilemma. When it rains it pours, they always say, and for China toward the end of 2015 it was a real cloudburst. The Chinese economy was slowing, dangerous deflation developing around an economy captured by an unseen anchor intent on causing havoc and destruction. At the same time, consumer prices were jumping [...]

A Long Dollar Story: China’s Short Profits, Prices, and Producers

By |2018-09-10T16:59:18-04:00September 10th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the first half of the Great “Recession”, China and the rest of the EM world seemed immune. It was American subprime mortgages that we were told was causing all the problems, and if European banks had somehow gotten themselves entangled in the rotten real estate mess so much the better for where growth was invulnerable. This first instance of [...]

The Smoke Thickens In China

By |2018-08-13T11:54:23-04:00August 13th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A major part of any yield curve is inflation expectations. Nominal growth particularly toward the longer end of curves sets the agenda for trading. But further out there are several confluences that may cause distortions. For Economists, these are conundrums. There are times, however, when curve dynamics remain pretty simple. These are not usually the best of times. As my [...]

Chinese Inflation And Money Contributions To EM’s

By |2018-06-12T18:40:36-04:00June 12th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The People’s Bank of China won’t update its balance sheet numbers for May until later this month. Last month, as expected, the Chinese central bank allowed bank reserves to contract for the first time in nearly two years. It is, I believe, all part of the reprioritization of monetary policy goals toward CNY. How well it works in practice remains [...]

All The World’s A (Imagined) Labor Shortage

By |2018-05-11T11:20:48-04:00May 11th, 2018|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last year’s infatuation with globally synchronized growth was at least understandable. From a certain, narrow point of view, Europe’s economy had accelerated. So, too, it seemed later in the year for the US economy. The Bank of Japan was actually talking about ending QQE with inflation in sight, and the PBOC was purportedly tightening as China’s economy appeared to many [...]

Inflation Hysteria Takes A Chinese Hit

By |2018-04-11T15:39:44-04:00April 11th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Today is inflation day, as can happen on the occasional month. The US CPI came in without signs of acceleration despite the relinquishment of the Verizon effect on the statistical bucket. Financial markets are unenthused by all this, but you might not know why. The spread between 5- and 30-year Treasury yields, as well as the gap for 2- and [...]

China Prices Include Lots of Base Effect, Still Undershoots

By |2018-03-09T17:04:12-05:00March 9th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

By far, the easiest to answer for today’s inflation/boom trifecta is China’s CPI. At 2.9% in February 2018, that’s the closest it has come to the government’s definition of price stability (3%) since October 2013. That, in the mainstream, demands the description “hot” if not “sizzling” even though it still undershoots. The primary reason behind the seeming acceleration was a [...]

Inflation? Not Even Reflation

By |2018-02-09T11:20:30-05:00February 9th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The conventional interpretation of “reflation” in the second half of 2016 was that it was simply the opening act, the first step in the long-awaiting global recovery. That is what reflation technically means as distinct from recovery; something falls off, and to get back on track first there has to be acceleration to make up that lost difference. There was, [...]

Inflation Correlations and China’s Brief, Disappointing Porcine Nightmare

By |2018-01-10T18:16:02-05:00January 10th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Two years ago, China was gripped by what was described as an epic pig problem. For most Chinese people, pork is a main staple so rapidly rising pig prices could have presented a serious challenge to an economy already at that time besieged by massive negative forces. It was another headache officials in that country really didn’t need. For economists [...]

The Inflation of China’s Condition

By |2017-11-09T18:38:35-05:00November 9th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One day after the China’s government reported disappointing but consistent trade figures, that country’s National Bureau of Statistics published inflation estimates that are being branded at least on this side of the Pacific as some degree of “hot.” As is usually the case, the characterization is wildly off. China is no closer now to an inflation problem, thus solid growth, [...]

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