Before 2020, no one in China would believe that the Great Inflation is coming. After all, under the authority of China’s National Bureau of Statistics, the increase in the consumer price index has been precisely controlled at less than 3% every year, and it seems to be a prosperous scenario with good weather, abundant products and stable prices.
However, the year 2020 has passed, the price increase is so high that the Bureau of Statistics can not cope with it, and since this year is even more up, so even the National Finance Commission, the highest decision-making body, began to raise the alarm “imported inflation”. I certainly need to carefully sort out the real inflation rate.
Here, I chose ten representative commodity prices as the base price, and calculated the arithmetic average increase in the prices of these ten commodities, as the inflation factor. These ten commodities are: rebar, electrolytic copper, sulfuric acid, flat glass, gasoline, rice, soybeans, cotton, hogs, and compound fertilizer. These ten commodities represent the whole economy from basic manufacturing, real estate support, daily consumption and agriculture, and have a high status in their respective fields, so I do not give separate weight values here, but directly calculate the arithmetic average increase. Below are the prices and average increases for these ten representative commodities from 2014 to the first quarter of this year.
Price tracking of ten representative domestic commodities since 2014 (author’s tabulation)
In 2014 and 2015, the Chinese economy experienced a cold winter phenomenon, with a clear downward trend from real estate to industry. In the financial sector, there was a money shortage for a while and then a stock market crash. In the field of commodity prices, the average increase in the prices of ten commodities (i.e. inflation rate) was negative for two consecutive years, -3.1% in 2014 and -9.9% in 2015.
After 2016 China launched supply-side reforms, the legendary “price increase to inventory”, which in fact means that banks started a big easing policy, which of course brought a big price increase in 2016 and 2017, with inflation rates reaching 17.6% and 9.0% respectively.
Honestly, although the consumer price increase from the Bureau of Statistics is never below 3%, the decision makers know the real inflation rate, by heart. Generally speaking, a 5% price increase is inflation, and 10% is hyperinflation. 2016 and 17 years of such price increases have been too malignant to be malignant. So after 2018, a series of contractionary measures were initiated in the financial sector. The central bank started proactive tapering operations, while the CBRC made a big show of cleaning up all kinds of unregulated trust and wealth management products. Against such a background, the real inflation rate fell to -1.7% in 2018 and remained at 7.6% in 2019 against the backdrop of a raging trade war. This is already quite a good macro-control achievement.
However, what no one expected was that in 2020, all of a sudden, a new crown of panic spread around the world. The global economy was turned off the engine, relying on central banks in Europe and the United States and other countries to issue money to keep the economy running. This kind of screw-up is bullshit and is sure to bring about violent inflation. As expected, the real inflation rate in 2020 is as high as 25.9%, I really can’t comment on this kind of data, I can only say that it is the creation of people.
Well, then in 2021, the Democratic Party in the United States through massive and unscrupulous election fraud, dry Trump (Trump), the far left successfully ascended to power. Then, this gang of late-stage political correctness patients who do not distinguish between men and women in the toilet did three things: first, prohibit the normalization of the economy, forcing the U.S. states to close completely on the grounds of the new crown; second, restart a variety of extreme environmental measures stopped by Trump, and restrict shale oil extraction; third, first sent two trillion dollars, and then plans to send three trillion dollars. This combination of punches down, the global economy want not to continue to inflation, are impossible.
In the first quarter of this year, China’s real inflation rate reached 6.6% again. Note that this is only the first quarter. If this trend can not be held down, this year is easily break the rhythm of 20%. The point is that this inflation, which has nothing to do with China, is purely the result of the far left in the United States, which has brought the global economy to the fire.
In this matter, I personally really do not know what to say. Now, the global pricing of commodities has long converged, basically a price, the price difference between Europe and the United States and China will not exceed 5 percentage points. There is no reason why you the United States indiscriminately printing money at the same time to engage in extreme environmental protection, the commodity prices blow up, China can still maintain the stability of oil, chemical raw materials and steel prices?
For the first time in human history, this is also the first time that the US, the center of the global economy, is completely in power with this magical creature of the far left in full control of Congress and government, and conservatives are completely driven out of the center of power. How deep a hole the far left will take humanity into, we will soon find out anyway. In this case, we must “trust” the strength of the far left, they will not drag it out for long.
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