Tag Archives | inflation

EU CPI Jan14

Deflation gets closer in Europe, USA and China

Demographics drives demand.  If it doesn’t, then its hard to think what does.  So forecasting economic growth depends on two key variables: If you have lots of young people in your adult population, then you should have fast growth If you have lots of older people, then you will be lucky to have any growth […]

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Deflation far more likely than inflation

The last in the blog’s series on things that we think we know, but may not, looks at the prospects for inflation.  A new survey this week of the world’s wealthiest individuals summed up the consensus view: “If there are two factors that make the rich stand out, on this survey, it is their fear […]

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Deflation Jul13

“Deflation fears spark shock ECB rate cut”

The mention of deflation in the above front page headline of Friday’s Financial Times will not have surprised blog readers.  But it appears that not enough people in the European Central Bank read the blog, as the FT went on to report the ECB’s sense of “shock” at the thought that deflation could now be just around the corner. This highlights the enormous […]

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China lending Apr12.png

China lending jumps to hit $380bn Q1 target

China’s leaders have a lot to worry about. The purge of Bo Xilai has now been followed by news of his wife being suspected of murder. This makes the run-up to October’s leadership transition even more difficult. Only 3 months ago, Bo was being tipped by some to join the Politburo, and even to become […]

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China PPI Dec11.png

China’s producers lose pricing power

China’s economy is slowing rather fast. That’s the only conclusion to be drawn from the above chart. It shows a major collapse in producer price inflation (PPI), from July’s 7.5% peak to just 2.7% in November. The decline from September’s 6.5% level has been particularly dramatic, with the index down nearly 2/3rds in just 2 […]

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China lend2 Aug11.png

China’s power consumption hits new record

China’s growth in electricity consumption is a much better guide to its economic growth than the published GDP figures. This was confirmed by likely next premier, Li Keqiang. It has been a major reason for the blog’s long-standing focus on this key area. The problem with GDP is that it is a target for local […]

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China auto Aug11.png

China’s auto market goes ex-growth

China’s auto market has gone ex-growth, as the above chart shows. Monthly sales in July (red square) were the 2nd lowest since July 2010. The problem is the continuing fall-out from the end of China’s great credit bubble. Inflation hit a new high of 6.5% in July. More importantly, food prices rose by 14.8%, up […]

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China CPI Jul11.png

China’s food price inflation hits 14.4% in June

Since Q4 2008, China has been creating one of the largest credit bubbles in history. First, it doubled bank lending to $1.4trn in 2009 (one third of GDP), and then maintained it close to this level. Secondly, it added a stimulus package worth another 13% of GDP ($580bn), focused on providing cheap electrical goods and […]

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China CPI Jun11.png

China’s inflation at new high, bank lending slows

The blog continues to worry about signs of a slowdown in China. Major commodity trader, Glencore, said this week “we see a pullback in China and it will continue“. This challenges the views of Dow CEO Andrew Liveris last month, and Rhodia CEO Jean-Pierre Clamadieu – who said last week he saw “no material signs […]

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China’s empty shopping malls

The South China Mall opened nearly 6 years ago. Nearly 3 times the size of Minnesota’s vast Mall of America in the USA, it supposedly symbolised China’s arrival as a consumer power. But as this Australian TV video shows, the Mall today is virtually empty. As are numerous other shopping malls built more recently. Yet […]

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