Chinese Inflation Hits 6.4%, Government Tells People Not to Buy Silver.

In Commentary, Inflation on July 11, 2011 by CQCA

China Daily reported that the Chinese CPI has reached 6.4%, the highest in three years.

If you had put money in the bank in June 2010 for one year, your interest rate would have been 2.25%. Since CPI is now at 6.4%, Chinese savers have actually lost wealth. Put in another way, real interest rates in China are about -4.15%.

Not surprisingly, yesterday CCTV had a special report on why silver is a bad investment.

Here is my favorite quote, courtesy of Google Translate: “Chun-Li Wang told reporters, silver in the first half of the test roller coaster price fluctuations, the company has gone through half of the ocean, half of the flame of the abyss. Chun-Li Wang analysis, investment in silver and gold investment are very different, because the value of silver is relatively low, ordinary working-class can afford, so people buy and invest more than an ordinary consumer, and this ability to judge people without investment , the public mental trend is very strong, difficult to resist collapse of the sense of risk. Because silver bullion this one, it touches the surface, this is the most popular working-class, the most common investors, some retired, he’s took a pension, he can, he can buy one, that working in Beijing, he can buy one, so we feel very much a danger that.

The original Chinese text is from iFeng Finance, and the television report can be seen on Diyi Shijian (starts at about 26:00 and ends when they start talking about sofas).

One Response to “Chinese Inflation Hits 6.4%, Government Tells People Not to Buy Silver.”

  1. Very interesting.

    I wonder if the Chinese trust the investment advice of their leaders.

    BTW, Great Blog!

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