Jump to navigation

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Futures          
       
more >>

We Asked Traders

We asked traders for their opinion on the launch of bitcoin futures

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

Energy demand steps back in play
Advertisement
more Volatility>>

Volatility

Volatility & opportunity in the energy sector
more Financials>>

Financials

Daily Price Action: E-mini S&P 500
more Options>>

Options

Trading Vertical Option Spreads

Advertisement

Commodities get green light as China ignores inflation

By Phil Flynn

December 13, 2010 • Reprints

Playing With Fire

The Chinese government failed to act aggressively against their growing inflation problem. The failure to act seems to suggest their political will or perhaps they’re failing to grasp the looming danger this inflation problem poses for the Chinese economy. Oh sure, the Chinese government promised to do more to combat inflation that came in on the consumer side at a blistering 5.1% and on the producer side at an even more disturbing 6.1%. Yet China's lack of courage is a green light to start buying commodities again. The market is going to lose confidence in the already shaky China central bank.

As China's inflation rate soared to a two year high, the Chinese government failed to act decisively. Promises are nice but some wonder what it is going to take. China is getting intoxicated with its growing economic power and the bubble it is creating. When the bubble is expanding it feels so good that you hate to let even a little air out of it. Of course if they don't, we know how this story will end, we know that it will not be pretty. The reason the Chinese failed to act is they said that a lot of the inflation price came from food prices which increased by a whopping 13.3% and by temporary and seasonal factors and they believe will likely slow inflation back to 5% or lower in December. They believe that some of the steps they have taken to ease feed cost by releasing government reserves of grain should help put downward pressure on prices.

Yet to blame the increase on food prices seems to suggest that the Chinese government is in denial. Residence costs and utility costs increased by a hefty 5.8 percent. The Chinese are blinded by their manipulation of their own currency and fear that any devaluing of that currency even the perception by increased rates seems to suggest a lack of confidence in their own people and their own economy. Now with China's data underestimating its real inflation numbers, it is possible that we may see the bubble burst faster than they imagine.

Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at pflynn@pfgbest.com.

About the Author

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

 

Related Articles
Energy demand steps back in play
Crude shoulder season blues
Crude corrects on production pop, but demand side is looming
Oil risk factors rise
Refiners work overtime as crude inventories drop
Previous
Bond traders remain wary of returning growth
Next
Equities higher on low volume
Related Terms
bank 6455energy 3807Energies 2981Phil Flynn 657Chinese government 551People's Bank of China 496PFGBest Research 384food prices 176Energy oil china inflation commodities 1

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images