The World Is Playing A Game Of Currency Chicken And The Result Will Be A Crash

Monday, December 6, 2010
By Paul Martin

Mike “Mish” Shedlock, Global Economic Trend Analysis
Dec. 6, 2010

China’s is overheating. Consumer prices in aggregate rose at an annual rate of 4.4% as of October. Food price are up 10.1 percent according to China Financial Daily.

Moreover, accelerating inflation is hurting profit margins in China’s service sector. China’s non-manufacturing PMI fell to a nine-month low in November, with new orders in consumer service industries showing outright contraction.

In response to these inflationary price pressures, China declared a shift to a “prudent monetary policy”, including price controls at Walmart.

This begs the question: Since when do price controls constitute “prudent policy”? Price controls have never worked in history and this time will be no different.

The Rest…HERE

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