Chinese inflation falls to two-year low

Tom Malthus submits:As the chart below illustrates, Chinese inflation has risen above levels where over the past five years Chinese authorities reacted with significant hikes in the country’s benchmark deposit rate. Yet, Chinese authorities may delay a hike, at least for the moment, to measure the effectiveness of targeted policies at the property sector and several increases to China’s reserve required ratio, now just below the series high of 17.5% at 17.0%.

The Chinese government famously makes large purchases of US-denominated assets, mostly government bonds, in order to prevent the value of the dollar from falling relative to the renminbi. But how does it get that money? Brad DeLong explains:

TOKYO (Reuters) - Asian shares slumped on Monday after sluggish U.S.