2010-10-29

PBOC versus FRB inflation

Mish Shedlock has a good post (Misguided Love Affair with China; China's Massive Monetary Expansion and Crackup Boom) talking about the growth in money supply in China and the U.S. The chart below compares M2 growth since August 2008 in both China and the United States.

An important factor to consider is GDP growth in China, compared to no growth in the United States—but each person may have their own idea as to the quality of that growth.

I made this chart for the Chinese blog, but here's the relevant quote from Chen Deming, in English:
Because the United States' issuance of dollars is out of control and international commodity prices are continuing to rise, China is being attacked by imported inflation. The uncertainties of this are causing firms big problems.


The title of the graph is a Chinese idiom which is very similar to "the pot calling the kettle black." It refers to soldiers fleeing a battle: [Those who have retreated] 50 steps laugh at [those who retreated] 100 steps.

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