Those looking for price inflation can easily find it if they open their eyes and look at the much beloved BRICs, Brazil, Russia, India, and China, as opposed to where everyone is looking, which is to say the United States.
MarketWatch reports China’s June inflation rises 6.4%
Monthly data released by the National Bureau of Statistics of China showed the consumer price index for June climbed 6.4 % from the same period the year before. Many economists had expected the rise to be between 6.2% and 6.4%.Chinese Central Bank Downplays Soaring Costs
That increase compared with a 5.5% jump in May, which was itself the fastest rise in CPI since a 6.3% increase in July 2008.
China's central bank chief Friday suggested markets shouldn't over react to a large rise in year-on-year inflation for June, saying that month-on-month figures are a better gauge of prices.Nonsense From Zhou
"It's better to use month-on-month inflation (data)...seasonally adjusted and annualized," said People's Bank of China Gov. Zhou Xiaochuan.
"In China, we use the year-on-year inflation figure without seasonal adjustment: that's the problem," Zhou told a financial conference. "You always try to think about the base effect."
While the collapse of communism in the 1990s destroyed most Russians’ standard of living, something resembling a middle class began to appear again between 2000 and 2008, as real incomes doubled and oil revenues kept wages and pensions well ahead of inflation.India Hikes Rates 10 Times in 16 Months to Combat Inflation
However, since the onset of the economic crisis in 2008, real incomes have been stagnating as wages have been frozen – while inflation gallops on.
Since the onset of the economic crisis in 2008, which saw gross domestic product fall 8 per cent in 2009, wages in most sectors have been frozen, while inflation, temporarily damped by the crisis, has now picked up. In the first quarter of 2011, real wages fell 2.9 per cent, driven by higher inflation than expected.
While official inflation for the year sits at a little more than 9 per cent, many think this statistic is fudged. “I think the real inflation rate is being understated by official statistics,” says Sam Greene, a professor of political science at the Moscow-based New Economic School.
Over the past five years, official statistics show prices rising 62 per cent but most Russians feel much greater increases.
“The middle class is splitting in two,” says Mikhail Chernysh, head of the social mobility section of the Russian Academy of Sciences Institute of Sociology. “One part is in danger of falling out of the middle class, while the other part is gaining.
“Getting into the middle class is very difficult in Russia and once you are there, it is hard to stay.”
The Reserve Bank of India (RBI), the central bank, has raised interest rates for a record 10th time in 16 months, grimly continuing its efforts to choke inflation by checking money flow.Note: The above link may trigger unwanted popups.
But belt-tightening, the RBI has decided, remains one of the critical ways to tackle inflation, which rose to 9.06 % in May, up from 8.66 % in April.
"High input prices, rising finance costs and global uncertainties are adding to negative sentiments ... and a high interest rate environment will most certainly put brakes on new investments," Associated Chambers of Commerce and Industry of India president Dilip Modi told Agence France-Presse.
RBI governor Duvvuri Subbarao is unimpressed by such pleas, declaring in a statement that the immediate priority was to kill inflation, not to feed growth.
See also these top features from Townhall Finance:
|The Ticker||Daily Market Commentary|
|Larry Kudlow||The Tea Party Is Ceiling the Deal|
|John Ransom||Obamanomics: Never Say Sorry to a Cash Contributor|
|George Friedman||Libya and the Problem with The Hague|
|David Malpass||Debt Outlook Stark|
|Tony Marsh||If Barack Obama Wins Reelection, This Will Be Why|
|Mike Shedlock||Inflation Wild in BRIC Countries|
In Other News: New Captain America Will be Black; Racist Liberals Suddenly Become Fans | Michael Schaus
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for December 17th, 2014 | John Ransom