Inflation Hits an 11 Year High Record (Expect to see this headline a lot)

Well, as expected, the inflation bear is coming out of hibernation and has a very sore head indeed. February’s rate was 8.7 per cent, the worst for 11 years. As we noted recently, this is a huge issue the Communist Party and is a major problem for ordinary people. Interestingly enough, the announcement about inflation was matched by one noting that China’s (usually referred to as “politically sensitive”) trade surplus for the month had fallen dramatically, particularly against the U.S. If anybody needed it, that is more confirmation that the recession is beginning to bite in America and consumers are pulling in their horns. That could actually have a plus side for China by cooling the economy and taming inflation that way. Of course, then you could have all sorts of other problems with unemployment causing unrest. It’s a complicated business trying to run a careening economy, keep 1.3 billion restless, hungry people happy…..and also make sure you don’t lose power at the same time.