Inflation in China at 15%?

From naked capitalism:

This tidbit, from a report on impressions of conditions in China, via a steel buyer who has been making the rounds in Asia (hat tip reader Michael) is more significant than it appears. High inflation levels in China (and the powers that be seem to get worried when it goes over 11%-12%) is consistent with the authorities having started to ease up on stimulus, particularly pushing banks to lend.

And high interest rates feed stock market speculation. Interest rates on deposits are low, so the routes for investors to preserve cash are stockpiling commodities (we’ve read various reports of both businesses and speculators going this route) and the stock market. But stocks often backfire as a store of value when too many people latch on to the same strategy.

I was at presentation a couple of years ago at the Asia Society on China, and one of the panelists observed that if you wanted to design a system guaranteed to produce hyperinflation, it would be hard to do a better job....MORE