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VodkaPundit

The China Syndrome/Bernanke’s Blues

September 19th, 2007 - 10:24 pm

I like a good stock market rally as much as the next investor, but here’s another sign that the Fed cut rates too much, too soon.

Inflation in China — recently at 6.5% per month — could, and very likely will, spill over onto our shores.

UPDATE: I forgot to say, Whenever a government freezes prices to contain inflation, it only delays the inevitable. And also makes it worse. Today’s 6.5% inflation could easily top 10% or more tomorrow. Watch China closely. Watch China’s labor market even more closely. It wouldn’t take much more than a minor murmur in job creation to cause some sleepless nights in Beijing.

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