Thursday, March 6, 2008

Asia not in Stagflation (no shit, Sherlock)

I'll paraphrase, because I don't really want to name the American double barreled investment bank which sent this to me this morning:
There is no stagflation in Asia – growth continues to be strong, and inflation is mainly in food.
That was basically it. Brilliant.

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Meanwhile, bullish talk is whizzing around the market that rates are not going to be hiked in China and that the currency will be ramped instead.

More than it already has been since the initial 2% reval 2-1/2 years ago? Since which time it has risen vs the USD at almost 5% pa? (That's a log scale in the pic from Bloomberg, folks.) And that will be enough to cool the economy, keep inflation at bay and keep the pitchforks in the rural... er... pitchforkholders? Gimme a break!
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