Below is the Chinese CPI. The government has tried almost as many ways to slow it without raising the Yuan exchange rate as the US Tea Party has found ways to reduce the US Federal debt without raising taxes. Neither will work; neither can work. If the world wants to make the Yuan the reserve currency, it will benefit the US considerably. The second chart shows the PPI which implies accelerating, not declining future CPI numbers. Look for a rate hike followed by an increase in the value of the Yuan. A sufficiently valuable Yuan will stifle inflation -- but it won't be good for exports.
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