{"id":2747,"date":"2010-12-27T19:39:11","date_gmt":"2010-12-28T02:39:11","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=2747"},"modified":"2018-08-16T17:47:50","modified_gmt":"2018-08-16T21:47:50","slug":"chinese-interest-rate-rise","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/12\/27\/chinese-interest-rate-rise\/","title":{"rendered":"Chinese interest rate rise"},"content":{"rendered":"

You may have heard that in a surprise announcement the Chinese government raised interest rates 0.25% on Saturday, 25 December.\u00a0 As I have been writing about on the blog for several months, the effort is being launched to ease inflation pressures in China.<\/span><\/p>\n

Analysis:<\/strong> In my 2011 Predictions<\/a>\u00a0post I said that, “The Chinese are on the brink of two ugly things: massive asset inflation and the bursting of that bubble…”\u00a0 The worldwide economy remains in a slightly fragile state of recovery after the Great Recession.\u00a0 Thus, it’s a good thing that the People’s Bank of China has raised interest rates.\u00a0 The last thing that the worldwide economy needs is another out-of-control bursting asset bubble of massive proportion.<\/span><\/p>\n

That the Chinese had to raise interest rates again so quickly is an affirmation of what I wrote in my “2011 Predictions.”\u00a0 Clearly, the Chinese are more worried about inflation than they have let on to the worldwide investment community.<\/span><\/p>\n

My opinion remains that the Chinese are going to have a difficult time balancing both the slowing of the economy\u00a0and keeping social protests to a minimum.\u00a0 The gap between the haves and have-nots in China has grown tremendously over the past 10 years.\u00a0 So the pseudo-communist system is not exactly working for everyone in China.\u00a0 A dramatic slowdown in the Chinese economy, brought on by an overzealous People’s Bank, would result in disproportionate hardship on the have-nots in China.\u00a0 That, in turn,\u00a0would likely lead to virulent social protest.\u00a0 Thus, the Chinese are going to have to have a slight bias toward economic growth in order to maintain political control and order.\u00a0 In turn, that will likely lead to a sloppy burst of the Chinese economic bubble.\u00a0 Ouch!\u00a0 Clearly neither scenario is a good thing for China; and, in my opinion, it is a near impossibility to balance the two opposing forces.<\/span><\/p>\n

Importance grade:<\/strong> 7; that the Chinese raised interest rates again means that they are nervous about their bubble despite their public comments to the contrary.\u00a0 I will continue to watch this story very closely.<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

You may have heard that in a surprise announcement the Chinese government raised interest rates 0.25% on Saturday, 25 December.\u00a0 As I have been writing about on the blog for several months, the effort is being launched to ease inflation pressures in China. Analysis: In my 2011 Predictions\u00a0post I said that, “The Chinese are on […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2747","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=2747"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2747\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=2747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=2747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=2747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}