4 Reasons Why China Is Headed For Meltdown…A brutal shock for the world.
Raul Ilargi Mendoz
Jun. 16, 2012
Please allow me to start off with a few explanatory bits. At The Automatic Earth, we have always defined inflation in a different manner from most other sources. That is to say, we define inflation as an increase in money and credit supply (relative to available goods and services), combined with velocity of money, not as simply an increase in – some – prices.
We see this this as significant because if inflation is defined as any price increase, we lose sight of why prices increase, a crucial “detail”. Similarly, we don’t attach much importance to CPI numbers, since they lack the same attention to detail we find with the definition of “inflation” as it is generally reported and used.
That said, I think it’s high time to look at some recent Chinese data and try to draw what – initial- conclusions we can from them. I also think we can peer through them towards a picture of the future that few have acknowledged to date, and perhaps even fewer wish to. If what I’m about to say is even halfway true, the economies of countries like Australia and New Zealand, which we visited recently, as well as many others, are in for a brutal shock.