China's macro-aggregate is out. Official GDP climbed 10.7% in the fourth quarter of 2009.
Of course, media stories on this report will fail to point out that this is distorted growth fueled by the money printing of China's central bank. Once the People's Bank of China slows money growth, as it appears to be doing now, the readjustment from the distorted capital structure, fueled by the earlier money printing, will be painful.
China has a very fast growing economy, but China's attempt to mimic Western central bank money printing operations will simply put China's growth on a roller coaster ride.
Jim Chanos is going to make a lot of money with his China short positions if, indeed, the PBOC is serious about slowing money growth.
I recently heard a talk by Barnett saying that there is a difference between printing money and expanding credit--one leads to price inflation and the other the business cycle. My question is two-fold: (1) do you see this distinction and (2) if so, which is the case in China right now?
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