This week: RMB, Property Price, Inflation

Just a short post. I am urged to do so when the headlines in the past 4 days shows the same thing - Renmingbi and property prices/ land sales.

Clearly Renmingbi has become a political issue - both China and US politician enjoy very much wrestling on the point whether a piece of paper bearing Chairman Mao's face is worth more or less, now both sides are getting even more excited by spitting on each other's face... we observers please don't forget both are secretly cranking out their own paper as much as they want... I just don't know when it will stop.  Just enjoy watching it when it's going on...

I checked my eco101 and find this term called "PPP" invented by economists in an ideal world... I am not sure what's an ideal world but let me just use this methodology, I realize that the money I have to pay to buy an apartment at my hometown (Wuxi), at the current exchange rate, can already afford me a no-worse house in a small city in of US along East Coast!  Gosh! I bet most Chinese people would choose to move to US if allowed ...  So i don't know where is the under-valuation from.  it may be 5 years ago.  but now a 1/2kg of bakchoi costs 7 yuan.  US politicians should be pitiful about Chinese people.

This brings about the topic of inflation.  Property price is not the only one catching the headline. Electricity, water, and gasoline costs already moved up.  The only thing has not yet moved, probably, is wage.  But i think it won't be long.  Our economists/statistician selectively "ignored" too many items on the CPI check... soon i think they themselves will scream for wage inflation to keep up with expenses.

On international front, Fed maintained its previous statement that it will keep interest rate low for "extended" period. I hate linear projection but have to think about the inflation scenarios more seriously.  The beast may turn out to be uglier than expected...

The money tap is still turned wide open by the Central Bankers, in the name of "still fragile" global recovery. Soon my wallet may indeed become very fragile because it can't keep the money inside from not shrinking...