US vs. China Money Supply - Who is Printing More?

Townhall.com ^ | January 11, 2012 | Mike Shedlock

[Kaslin]

Chinese stock have been on a 2-day tear as Premier Wen Jiabao has come flat out in support of the stock market.

Moreover, money supply in China is up the most since last April and new Chinese loans exceeded the estimates of all 18 Bloomberg economists. M2 rose 13.6 percent, the fastest pace since July.

Bloomberg reports China Stocks Rise Most in 3 Months on Loan, Money Data

[gaijin]

The parallels to Japan are amazing.

We know how that finished.

Empty chinese cities = Japanese gold-flake sake, eating sushi off nude girl.

Now the party, but soon comes the hang-over.

[proxy_user]

Many people don’t understand the corner China is painted into by the fixed exchange rate.

In order to buy all dollars that are presented to the central bank for exchange, they have to come up with huge amounts of Chinese money. The only way to get it is to print it. So when we create money over here, the inflation produced shows up in China.

[familyop]

CIA World Factbook

Country Comparison: Current Account Balance

This entry records a country's net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
[...]
1 China $ 305,400,000,000 2010 est.
[...]
197 United States $ -470,200,000,000 2010 est.

[BfloGuy]

So when we create money over here, the inflation produced shows up in China.

Yeah, but it is their choice and it's biting them in the rear. The inflation is causing prices and wages to rise so quickly that their vaunted trade surplus is being whittled away as they lose their advantage and as imported goods look more and more attractive to the Chinese consumer.

[proxy_user]

Well, consider the alternative. They price themselves out of the market, large numbers of workers become unemployed. Angry men start gathering on street corners discussing their grievances with the government, and....

[mjp]

money supply in China is up the most since last April and new Chinese loans exceeded the estimates

Money supply is up. Credit is loose. They are setting themselves up for an overheated economy followed by a contraction and a recession.

[Elsie]

They are setting themselves up for an overheated economy followed by a contraction and a recession.

When the elephants fight; the monkeys flee.

Afican proverb