China Inflation at 10-Year High

China inflation hits 10-year high

Chinese inflation soared to a 10-year high of 5.6% in July, led by a sharp increase in food prices.

The price of pork and other meats jumped 45% compared with the same month a year earlier, while eggs rose 31%.

July's annual inflation rate was the highest since February 1997, and was up from June's rate of 4.4%.

The latest inflation figure is likely to mean more Chinese interest rate rises. Rates have already risen three times in the past six months.

Watch out for some drastic moves by the Chinese government to control this.

Chinese authorities have also ordered investigations into whether farmers or food companies are colluding to push up prices.

I can imagine what those "investigations" will consist of.

This also means that you can stop worrying that China will start dumping dollars. They will hold onto foreign currency that keeps it's value.