{"id":2753,"date":"2010-12-28T08:59:07","date_gmt":"2010-12-28T15:59:07","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=2753"},"modified":"2018-08-16T17:46:21","modified_gmt":"2018-08-16T21:46:21","slug":"more-evidence-of-chinese-inflation","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/12\/28\/more-evidence-of-chinese-inflation\/","title":{"rendered":"More evidence of Chinese inflation"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">This morning it was announced that the city of Beijing in China is raising its minimum wage by 21% (!).\u00a0 Ostensibly the reason is because of inflationary pressures.\u00a0 That is, prices are so high that people cannot afford to buy the essential staples of their life.\u00a0 That kind of concern can only exist if you have a massive difference between the haves and have nots in a society.\u00a0 Rhetorical question: how can a &#8220;communist&#8221; society survive these kinds of imbalances?\u00a0 Now does it make more sense\u00a0that I am <a href=\"https:\/\/jasonapollovoss.com\/web2010\/12\/13\/what-my-intuition-tells-me-now-2011-predictions\/\" target=\"_blank\" rel=\"noopener\">predicting<\/a>\u00a0that the Chinese economic bubble will burst and that there will be social protests?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Separately, raising wages is a short-term solution to a long-term problem; a short-term solution that will make the long-term reckoning much more severe.\u00a0 To deal with inflation by putting more money in people&#8217;s pockets (raising wages) you put more money supply into an economy with a fixed number of goods.\u00a0 This will lead to higher prices and more inflation &#8211; duh!<\/span><\/p>\n<p><span style=\"font-size: 16px;\">The Chinese are not stupid, so why would they do this?\u00a0 When\u00a0a nation\u00a0shifts\u00a0its focus to the short-term from the long-term it usually means that there is a crisis developing or already present.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">By the way, this crisis, whatever stage it is at, makes the Chinese vulnerable on the &#8220;fixed yuan to dollar&#8221; exchange rate front.\u00a0 I would expect governments around the word, including Barack Obama, to choose a moment when they will start hitting China hard.\u00a0 The punches will be thrown to get the Chinese to allow the Yuan to appreciate.\u00a0 This, afterall, is the source of most of the Chinese inflation, asset bubble, and widening income gap.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">It&#8217;s going to be an interesting 2011 in China.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This morning it was announced that the city of Beijing in China is raising its minimum wage by 21% (!).\u00a0 Ostensibly the reason is because of inflationary pressures.\u00a0 That is, prices are so high that people cannot afford to buy the essential staples of their life.\u00a0 That kind of concern can only exist if you [&hellip;]<\/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-2753","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2753","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=2753"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2753\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=2753"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=2753"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=2753"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}