Tag Archives | inflation

China lendSept10.png

China warns of stability risks from housing bubble

China’s leadership seems to be increasingly confident about its ability to redirect the economy towards more domestic consumption over time, and away from the previous over-reliance on exports. As the above chart shows, bank lending (red column) is well on track to meet the $1.1trn target set for 2010, down 21% from 2009′s high. In […]

Continue Reading
Pimco Aug08.jpg

Global inflation on the rise

Pimco, the world’s largest bond investors, are worried about rising inflation. Their main concern is that many Asian and Middle Eastern countries had ‘anchored’ their currency to the US$. ‘With that anchor gone’, they comment, ‘due to the US Federal Reserve’s focus on preventing the US financial system from falling into a depression-style downward spiral, […]

Continue Reading
OilJul08.jpg

Bank of England warns on inflation

Andrew Sentance of the Bank of England has issued a very clear analysis of current oil and commodity price movements. It rejects the view that these have been primarily caused by speculators. Instead, it points to increasing demand, and lack of supply, as the main causes of today’s higher prices. The slide above sums up […]

Continue Reading

The ‘difficult task of damage control’

The central bankers’ bank (the Bank for International Settlements) is not very impressed with its members’ efforts over the past year. Readers may remember that the BIS Report last year explicitly warned of the problems that were about to occur in world financial markets. This year’s Report expresses its disappointment about what central banks did […]

Continue Reading
map1jul08.jpg

The blog’s first birthday

Its now a year since the blog started. Since then, 213 postings have appeared. It is now read in 72 countries and 620 cities (shown above). Most encouragingly, readership continues to steadily increase. Since January, it has risen a further 301%. The blog’s aim is to identify ‘the influences that may shape the chemical industry […]

Continue Reading

Sinopec receives $1bn subsidy in April

Sinopec is now losing 3000 yuan ($425) on every tonne of oil product sold, due to China’s price freeze, according to Sinopec spokesman Chen Ge yesterday. And this is on top of official government subsidies paid to Sinopec, which rocketed to $1bn in April. This was more that the entire subsidy paid in 2007. And […]

Continue Reading
china%20wages.jpg

China exports inflation (2)

I noted back in February that China is no longer exporting price deflation, and is instead causing global prices for commodities and manufactured goods to rise. A reader has now kindly sent me an interesting report from Credit Suisse, commenting on the potential inflationary impact of new labour laws in China. This is particularly important […]

Continue Reading

Inflation worries increase in China, USA

China announced yesterday that inflation had soared again last month, reaching 8.7%, versus the government target of 4.8%. Part of the increase is clearly due to the effects of recent major storms. But with the US Fed likely to cut rates soon, China remains in a difficult position. If it increases interest rates, then the […]

Continue Reading
%24feb08.bmp

Traders sell $, buy oil

‘ ‘A vicious circle now seems to be in place again, where a lower dollar inspires raw material prices to rally, which in turn increases worries about inflation’. This was how strategists at BNP Paribas summed up the US Fed Chairman’s two days of testimony to Congress last week. For the last 20 years, every […]

Continue Reading

Wheat prices add to CFO concerns

Wheat prices rose 25% yesterday, the biggest one-day rise ever, as Kazakhstan imposed restrictions on wheat exports. The rationale for today’s rising prices is three-fold: • US farmers have shifted land over to corn, to meet increased ethanol demand, and US wheat inventories are forecast to hit 60 year lows • Emerging countries are now […]

Continue Reading