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Chinese Inflation Rises At Fastest Rate In Two Years

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http://www.telegraph.co.uk/finance/economics/8125051/Chinese-inflation-rises-at-fastest-rate-in-two-years.html

The consumer price index (CPI) - a key measure of inflation - rose 4.4pc year-on-year last month, compared with 3.6pc in September, the National Bureau of Statistics said.

It was the fastest pace since September 2008 - the start of the global financial crisis, when consumer prices rose 4.6pc.

Consumer prices increased 0.7pc month-on-month.

The October figure, which outstripped several analysts' predictions, comes as the world's second-largest economy battles to rein in consumer prices and soaring housing costs.

Over the first 10 months of the year, the CPI was up 3pc, mainly driven by rising food prices and living costs, NBS spokesman Sheng Laiyun told a news conference.

"Price pressures are increasing. That means pressure on macroeconomic controls is increasing," Mr Sheng said.

The October CPI reading marked a "very sharp increase" and persistent upward pressures on prices meant any dip in the coming months would be shallow and short-lived, said Brian Jackson, a senior strategist at Royal Bank of Canada.

"It's obviously eye-catching.... There are some reasons to think it might pull back in the next couple of months but I wouldn't want to bet the house on that," Mr Jackson told AFP.

"More rate hikes are clearly on the way, and today's data also reinforces the case for faster currency appreciation," he added in a note.

The People's Bank of China last month raised its benchmark one-year lending and deposit rates by 25 basis points each - the first increase in nearly three years.

Still if the Americans print China won't now be importing US inflation.... Meaning higher wages for the Chinese which may eventually make American goods competitive..

As long as this recovery keeps gathering pace we have nothing to worry about....

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This says it all for me.

Xinhua quoted the China Association of Automobile Manufacturers auto sales in China grew 34.76%YoY to 14.68 million units in the first 10 months of the year exceeding the total number of vehicles sold last year.

(Sourced from Xinhua)

All cash buyers?

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This says it all for me.

Xinhua quoted the China Association of Automobile Manufacturers auto sales in China grew 34.76%YoY to 14.68 million units in the first 10 months of the year exceeding the total number of vehicles sold last year.

(Sourced from Xinhua)

I made a prediction here on the forum in January 2010 that Chinese auto sales for the year will be 17.5 million units. 14.68 for 10 months puts them on pace for 17.6 million units:).

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Very bullish, Chinese demand is driving inflation in the country. The state of China can move towards tightening.

http://www.zerohedge.com/article/china-wants-world-believe-inflation-jumped-44-line-shadow-expectations-fastest-fake-price-gr

China Wants World To Believe Inflation Jumped By 4.4%, In Line With Shadow Expectations, Fastest Fake Price Growth In Two Years

That China somehow magically pulled a 4.4% inflation number for October out of its hat is not surprising. After all this is precisely the number that the "local market" was expecting as there are no secrets in China, even if the Bloomberg surveyed Keynesian fundamentalists-cum-economists end up being "pleasantly surprised." Yet none of this is at all relevant: now even Credit Suisse's Sean Keane (see below) is openly ridiculing the magic 8-ball that the Chinese department of truth is. The only open question is whether this acceleration in the economy to a two year high will lead to a rate hike. And the answer, as Bank of America says, is no. Which means a whole of nothing is about to happen as a result of this latest non-news which just confirms that China's economy is telegraphed to be overheating at precisely the rate that its politburo has determined is just right.

First, the hilarious observations from Credit Suisse on the random number generator that China's economy is:

It’s worth noting that the local market is now expecting tomorrow’s October inflation print to come in at 4.4% [TD: we have a bingo], above the Bloomberg consensus of 4.0%. As the local Chinese market has a very good track record of correctly “predicting” data before it is officially released the reaction to a 4.4% number may be less of an outlier than it appears. When looking at this data its always worth remembering that somehow China is able to assemble data from around the country at a speed that defeats most better equipped statistical agencies around the world, and it does so across a geographical space many times as large, and with a sample set that should be hundreds of times bigger. How exactly this is done with such remarkable speed (given the lack of electronic payment data) remains a mystery.

All one can do is LOL at this definition of GIGO. And yet this very ******** is what drives trillions in capital flows around the world based on a fact point that is totally devoid of any factual significance. EMT indeed.

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This is an understatement. It should be closer to 20-30%

More like 100% according to thsi report

Food prices are being increased several times a day

http://beforeitsnews.com/story/257/886/Feeling_Inflation_s_Pinch,_Chinese_can_t_change_the_price_tags_fast_enough.html

“We can’t change the price tags fast enough!” said a purchasing staffer in a Beijing supermarket.

“Take cooking oil for example, we get three or four notices a day to increase the price,” the staffer said to Hong Kong’s Apple Daily.

For consumers facing worsening inflation, an average family has to increase its budget by at least an equivalent of about a hundred U.S. dollars each month. A housewife who cooks three meals a day quickly feels the pressure.

One such victim of inflation is Liang from Guangzhou who has to cook for a family of six. Just last year, her family could eat heartily for 1,200 yuan (US$180) a month. This year she needs to spend 2,200 yuan (US$330) per month to maintain the same quality of meals

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There seems to be two sides to the people sceptical of the Chinese government estimates. One side says the government is showing inflation running higher than it actually is, in order to make it look like demand is coming in stronger than it actually is.

The other side believes inflation is running higher than 4.4% and the government is downplaying the number.

My feeling is the 4.4% sounds plausible if a little high. The numbers coming out for example in car sales in the last couple months look hot, they look like some new demand has come into the market.

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The price of their vases are certainly going to inflate when this gets home:

A Chinese vase discovered during a routine clear-out of a bungalow in northwest London has sold at auction for a record £43m, leaving the sellers flabbergasted. Bainbridges Auctioneers in Ruislip, northwest London, had estimated the Qianlong-dynasty porcelain vase would fetch between £800,000 and £1.2m.

But the bidding attracted many Chinese buyers keen to get their hands on a piece of their imperial past, and the cost went sky high

http://news.sky.com/skynews/Home/UK-News/Vase-Sold-For-Record-43m-At-Auction-In-Northwest-London---Item-Found-In-Bungalow-Clear-Out/Article/201011215800929?lpos=UK_News_First_Home_Article_Teaser_Region_0&lid=ARTICLE_15800929_Vase_Sold_For_Record_%3F43m_At_Auction_In_Northwest_London_-_Item_Found_In_Bungalow_Clear-Out

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There seems to be two sides to the people sceptical of the Chinese government estimates. One side says the government is showing inflation running higher than it actually is, in order to make it look like demand is coming in stronger than it actually is.

The other side believes inflation is running higher than 4.4% and the government is downplaying the number.

My feeling is the 4.4% sounds plausible if a little high. The numbers coming out for example in car sales in the last couple months look hot, they look like some new demand has come into the market.

Did you read Robert Peston's blog on the chinese housing bubble? (cash buyers buying property and keeping it empty-new = best) . Would be interesting see registrations. They could be being bought up and held in garages.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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