By Tyler Durden
Pork Hyperinflation Sends Chinese Consumer Prices Soaring Most In 7 Years
The bizarre disconnect at the heart of China’s market pricing engine is getting bigger with every passing month.
Whereas in the 2009-2015 period, China’s consumer and producer (or wholesale) prices tended to track each other largely tick for tick, sometime in the beginning of 2016, roughly when global leaders decided at the Shanghai Accord to reflate the global economy by unleashing a massive Chinese credit impulse…
… China’s PPI soared higher, which in turn allowed China to rapidly export inflation across the globe, prompting central banks to confuse China’s latest credit reflation blast with a coordinated global recovery and tighten financial conditions, something which at the end of 2018 they promptly realized was a mistake after global markets tumbled, resulting in the latest global wave of coordinated central bank easing.
Well, fast forward to today when overnight China reported that with the tailwind of its latest credit boost long gone, those all important – for Chinese corporate profits and global reflation – producer prices (PPI) fell by 1.6% in October, more than the 1.5% estimate, and above September’s 1.2% decline, and …read more
Source:: Zero Hedge