China Growth Stocks

[Shengli]

It wasn't QE2, it was the Russian Wheat crisis last summer

My post was a very short blurb of a much more complicated problem that China faces and how QE2 is a part of a much bigger problem . That is why some of our stocks here are off more than 50% along with the accounting questions.

The inflation that is going on in most of the emerging markets that has contributed to higher food prices has to do with QE2 and other factors for sure. Of course what is going on in Russia is adding more gasoline to that fire.Speculation may be even a better term than inflation .The real problem in China has been the source of Chinese inflation is much more prosaic: their money supply is growing too fast, fueled by a credit bubble from Chinese banks, not the Fed. Chinese M2 is up 55% in two years, and its PPI is up 5.5% year over year. QE2, and certainly the commodities bubble contributes to inflationary pressure inside of China. one-off events like the Great Queensland Floods in Australia and the Russian drought have aggravated the problem . China still has some serious issues to solve and uncle Ben is not helping. To think some people were thinking it was as simple as increasing the Yuan.