Citi: “This Is Not A Healthy Chart”

Thursday, April 19, 2018
By Paul Martin

by Tyler Durden
Thu, 04/19/2018

We issued the first warning notice last December, in a post whose title said it all: “Global Deflation Alert: Chinese Credit Creation Tumbles To 27 Month Low.” It showed the chart which we – and UBS – have argued is the only one that truly matters for global inflation (or deflation): China’s credit impulse.

We followed it up two months later in February with “The Deflationary Canary: China Tier-1 Home Prices Post First Decline Since May 2015” in which we that as as result of the ongoing slide in the credit impulse, “expect further downside to home prices, not only in Tier 1 cities, but across the entire Chinese housing market” and added that “the last two time China’s housing contracted, the result was a deflationary wave unleashed across the globe; in fact some have speculated that the reason for the near-bear market in late 2015 and 2016 as well as the Fed’s derailed plans to hike rates in 2015 was largely due to the deflationary spark prompted by the sharp contraction in Chinese housing prices.” In short: deflation, and poor economic data was about to spread across the globe.

The Rest…HERE

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