Money Growth and Trade Data

Contrasting numbers from the latest data:

Import Export:
6月单月进口总值为753.7亿美元,同比下降21.4%％；单月出口总值为887.6亿美元，同比下降13．2％。
前6月进出口总值9461．2亿美元,同比下降23．5％。其中,出口下降21．8％,进口下降25．4％。

Money growth:
人民币贷款一季度4.58万亿元，二季度新增贷款继续逐月增加。5月6645亿元,6月份新增贷款1.53万亿元，今年上半年新增贷款合计7.38万亿元。 全年贷款可能达到10万亿元，远超过目标5万亿元。

中国广义货币供应量(M2)增速将接近或超过30%。5月份的数据为25.74%。而过去五年中，增速最高的2008年也只有17.82%。为实现拉动经济增长8%的目标，而以30%速度增发货币，通货膨胀的风险不言而喻。(http://money.163.com/09/0710/09/5DRN6RUS002534M5.html)

It's also helpful to look into the items of Import Export data:

从出口商品来看，今年上半年有一个值得关注的现象，我国主要劳动密集型产品出口同比降幅均小 于总体降幅21.8%的水平。其中服装及衣着附件出口458.6亿美元，下降8.5%;鞋类出口129.1亿美元，下降4.3%;家具出口117.6亿美 元，下降9.8%;塑料制品出口65.7亿美元，下降7.1%;箱包出口58.9亿美元，下降7%.同期，我国机电产品出口3066.7亿美元，同比下降 21.2%.其中电器及电子产品出口1243亿美元，下降22.7%;机械设备出口1038.8亿美元，下降18.9%.

在进口商品中，今年上半年，我国进口初级产品1167.7亿美元，同比下降 37.1%.其中，铁矿砂进口3亿吨，增长29.3%,进口均价每吨76.2美元，下跌44.6%;原油进口9077万吨进口，微增0.3%,进口均价每 吨344.9美元，下跌52.1%;大豆进口2209万吨，增长28.2%,进口均价每吨411.8美元，下跌29.6%.同期，进口工业制品 3078.2亿美元，同比下降19.7%.其中机电产品进口2082.3亿美元，下降21.4%;化学成品及有关产品进口493.2亿美元，下降 19.2%;汽车进口14.5万辆，下降31.4%;钢材进口813万吨，下降1.8%.

In other words, volume of basic materials and commodities import continued to GROW in double digit. So the gross export number is just saying slump commodity prices.

That is a lot of money pumping propping up a huge appetite. At the same time, export across board keep weakening. Enough reason of concern whether this big stomach can digest it all.

Inflation? Deflation? Goldman takes on Morgan Stanley

This is the original article appeared on Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=aXE_NxcOLRXc

Another piece of the debate. May we call it "great debate of the year"? it may very well be the topic of the next a few years - keeps economists busy. let's see.

At least one may conclude that since Goldman and Morgan Stanley can't agree with each other, then no one truly knows which way the wind is blowing at. Prepare for some more roller-coaster rides along the way. If you are trading, it may not be a one-way ride so watch your levels; if you are investing, long-term may really mean looong term... just prepare for it.

I find it more interesting to look at this side of the world, which will probably mean much more to you and me living in Asia... While it looks that everything we've seen so far has refuted the "decoupling" argument someone suggested many month ago, i am hesitant to jump on the bandwagon yet, at least on one aspect - liquidity. Specifically, i refer to Chinese banks and Chinese government actions. While no Chinese banks suffered from collapse of asset bubble nor Chinese consumers/corporates are facing a massive de-leveraging process, it looks that where the Government stimulus goes deserves additional scrutiny. After all, Chinese government is good at delay tactics... now the economy is already flushed with liquidity before export shows any sign of picking up in near term, despite the aggressive export tax rebate on nearly all items. It seems logic that when one is swimming in the river of cash and at the same time the factory is still idle, the money has to go somewhere - stock market, real estate, stockpiling of commodities... we are seeing reports on all the above.

If bank lending keeps going with the same pace as in the past 2 quarters, it will soon be another around of "inflation" outcry... when the time comes, I am afraid that all focus will be on China, China, China...

We are indeed heading for a very uncertain future.

Make Sure You Get This One Right

First post on my the blog. not my original creation, but once i saw a good thread, i didn't want to wait.

It's about the great inflation-deflation debate. one doesn't have to believe in author's conclusion (you probably have made your own bet on either side), it's a strongly reasoned argument, with some interesting analysis and charts.

This is quite a representative of a deflation argument. It's good read although sounding the "D" word on 4th July is uncomfortable to those mourning over the empire of debt.

Make Sure You Get This One Right

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