If home price is included in the inflation index,

China's inflation definitely exceeded 30% last year. Unfortunately, home price is not a component of CPI. China's CPI gained less than 3.5% last year. But with the pending cooling down in the real estate market in China, its CPI will probably stay tame in the years ahead. I don't foresee 30% inflation in China as long as the CP is still in control.

In the last 30 years, China's economy has expanded exponentially. But even during the worst times, we didn't see inflation of 30%. Usually countries with inflation close to 30% or higher are politically unstable. I can't imagine the collapse of the CP in the next 10 years. But the possiblity of hyperinflation still exists in the USA. The Fed will probably keep pumping money into the system to help the economy to recover. When the economy finally turns the corner, they could suddenly find that there is too much money flowing around. Wild beast is difficult to control. When inflation returns, it could be like a wild beast also.

所有跟帖： 

• I think you misunderstand China's oil policy. -凌长老- ♂ (570 bytes) () 08/15/2010 postreply 19:06:59

• Actually what you said above is deflationary -凌长老- ♂ (242 bytes) () 08/15/2010 postreply 20:02:04

• The possiblity of sky high oil price exists, -凌长老- ♂ (473 bytes) () 08/15/2010 postreply 19:12:36

• A war "not too big, not too small" may drive up oil price -凌长老- ♂ (211 bytes) () 08/15/2010 postreply 19:31:21

• The mideast has never been a stable place, -凌长老- ♂ (313 bytes) () 08/15/2010 postreply 19:44:33

• I share all the concerns you mentioned, but -凌长老- ♂ (593 bytes) () 08/15/2010 postreply 20:27:37

• Last time oil price went high, it trigged the subprime crisis. -天下无马- ♂ (569 bytes) () 08/15/2010 postreply 19:25:16