Perhaps, and I'm not kidding, he is watching Dalian live hog futures:
Is the decline ending as we approach the Lunar New Year?
From Asia Times, January 12:
Chinese central bank exuding confidence everything is under control but that are more risks than rewards of not nipping deflation in the bud
As 2024 gets underway, reasons to worry about China’s economy are almost too numerous to count: sub-trend growth, a deepening property crisis, falling exports, record youth employment and deflationary pressures.
As investors try to control the inclination to panic, it’s quite striking who isn’t: People’s Bank of China Governor Pan Gongsheng.
One expression of this calm is the PBOC’s avoidance of taking any assertive easing steps in recent months. An equally important one is the PBOC’s taking direct aim at recent yuan weakness.
By setting the daily reference rate for China’s currency at the widest gap to estimates since November, Pan pushed back at traders’ suspicions that Beijing might be angling to engineer a weaker exchange rate to boost exports. Nothing arguably would spur Chinese economic growth faster than following the Japanese yen’s downward trajectory.
The fact that Pan won’t pull the competitive devaluation trigger to boost exports, which newly released 2023 statistics show posted their first full-year decline since 2016, makes many wonder what the governor knows about the Chinese economy’s outlook that isn’t transparent to markets.
China’s exports shrunk 4.6% year on year, a reflection of economic weakness in its top trading partners. Exports to the US slipped by 6.9% in December from a year earlier, while shipments to the EU dipped 1.9%. Trade with regional partners including Japan, South Korea and Southeast Asia also fell.
Yet the idea that things might not be as dire as global investors fear is worth exploring given the conflicting signals emanating from Asia’s biggest economy.
Indications are that “the PBOC drew a line in the sand and defended the renminbi and, having defended key levels, the exchange rate now seems to be ticking higher,” says economist Louis Gave at Gavekal Research....
....MUCH MORE, they go deep.
Maybe it's some sort of epigenetic or cultural memory of China's currency experience:
September 2007
Chinese inflation hits 6.5 percent, highest rate in nearly 11 years
...If I recall correctly, the Ming Dynasty had to repudiate paper money in the 1450's to end a hyperinflation.
Update: I am pleased with myself.
Found this quote from "A History of Money":
Here's the Hyperinflator:
1448 Hyperinflation in China The Ming note nominally worth 1,000 cash has a market value of only three.
p 183
Ying Zong, Zhu Qizhen, 1436 - 1450 and 1457 - 1464, Emperor Ming Dynasty
