China Hides Rampant Inflation in Money Binge: Patrick Chovanec

Money, money everywhere. At least that’s what it feels like at the moment in China. Awash in luxury cars, condos and expensive jewelry, the Chinese are enjoying what looks to be an unstoppable boom.

But inflation figures due to be released tomorrow should give pause to those who assume China’s economy is on sound footing. To an extent few fully appreciate, China’s astonishing growth rates these past two years have been fueled by an even more astonishing expansion of its money supply, by more than 50 percent. Until now, the inflationary consequences have been largely camouflaged in the form of rising asset prices.