The Sarcasm Report v.8

Will inflation slay the Chinese dragon?
ASK shoppers in Shanghai what is to blame for the rise in inflation and you get a one-word answer: pork.

Hopefully they won't start stockpiling (hoarding) pork, because if they do the problem will just get worse. Before you know it you'd need a wheelbarrow of money just to buy a pig.

This staple of the Chinese diet has soared in price by more than 50%. University authorities in Shanghai have even stockpiled frozen pork to supply hard-up students with subsidised meat over the next academic year.

Can't say I didn't try. I'm sure it is just a short-term problem though, assuming the Chinese dragon isn't slayed.

It may have been Alan Greenspan, former chairman of the US Federal Reserve, who sounded the first authoritative warning that what he called “disinflationary pressure” from China might be easing.

That's like an arsonist warning us that the dry tumbleweed next to him is drenched in too much gasoline. Thanks Greenspan! What would we do without you?

Conventional wisdom adds that China’s reserves of labour are still practically infinite and productivity gains imply a real decline of 4% a year in yuan prices at the factory gate. Hence, say the economists, the China story remains intact.

Conventional wisdom also also has a property analogous to inertia, a momentum, that opposes the introduction of contrary belief; sometimes to the point of absurd denial... Not that we have that to fear, since the economists tell us that the China story remains intact. If we can't trust the economists, who can we trust?

The problem with this analysis is that political change in China and a wealth of anecdotal evidence from business people contradict it.

A wealth of anecdotal evidence contradicts what the economists are saying? How on earth is that possible? *shock* *gasp*

Last week China’s finance minister, Jin Renqing, was the highest-profile casualty of a government reshuffle ahead of the Communist party’s 17th congress on October 15. Tantalising rumours of mistresses and sexual favours swirled round the minister; but traders in Shanghai said they believed he had paid the price for his failure to stamp out inflation.

It is unfortunate that he failed to stamp out inflation. Now that he has no job it will be much harder for him to pay for the services he desires most. I think we should all observe a moment of silence for his loss. [dramatic pause] May the next finance minister learn from his mistakes. Stamp out that inflation lest you too find yourself having to make such sacrifices.

On July 1, the Chinese government phased out subsidies on about a third of all exports, targeting textiles, toys and other bargain-basement products.

They aren't the only ones targeting toys these days, lol.

“Made in China” is gradually losing its competitive edge, wrote internet blogger Li Donghui. “So I believe China’s policy of an export-orientated economy will come to an end. We have to start another economic engine. Why not stimulate China’s domestic demand?”

Congress needs to act quickly. If we don't get some seriously huge bailouts soon to our overleveraged subprime borrowers then China's export-orientated economy will come to an end. And then where will we be? Living off of the kindness of ourselves? Like that is going to happen, lol.