10 December 2007

China Takes Further Steps to Cool Down Economy

Inflation there is pretty high, with food inflation being somewhere in excess of 20%, and the price of pork in excess of 50%, so china has raised reserve requirements from 13.5% to 14.5%.

Their money supply is growing at nearly 20% a year, and at some point, there will be an overcorrection, probably juxtaposed with a dollar crash, which could get ugly there.

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