China's New Inflation Bodes Ill for US
By Christopher Ruddy
A well-known American businessman called me recently. He wanted to talk politics, but he started the conversation by saying, "Short China. If you want to make a lot of money, short China."
He alluded to having information about the precarious state of China's economy, but he couldn't share all of the details. This was just two weeks ago, but some data is starting to emerge that my friend may be right.
Just this past weekend, China announced that inflation had hit a 28-month record of 5.1 percent for November.
The announcement seemed to stun many as a complete surprise. The Chinese government was quick to blame surging food prices. But food prices had nothing to do with it. Rising food prices are an effect — not a cause — of inflation. Indeed, Chinese fiscal and monetary policies had everything to do with it.