Modest real world inflation, Bitcoin approaches hyperinflation (again)
- The data calendar is a little dry today. German consumer price inflation is about as interesting as the German coalition negotiations (i.e. not very interesting at all). The SPD leaders are trying to rally their party to the idea of another exciting grand coalition.
- UK consumer price inflation is a little more exciting. Bank of England Governor Carney has had to rediscover the lost art of letter writing to explain why inflation had exceeded the target range. This month's data is expected to bring the number back within range.
- The wannabe currency that is not a currency (Bitcoin) is having a high to borderline hyperinflation episode. Bitcoin's spending power has plummeted again. It seems unlikely that people have worked out how to sell Bitcoin (it is difficult to sell), and more that demand has faded. Supply cannot be reduced to balance failing demand, leading to volatile values.
- Ahead of this week's Chinese GDP data release, media reports suggest that growth may be understated because past GDP was overstated. The idea that Chinese data is not entirely reliable is, of course, utterly shocking. However, a brief glance at US growth revisions shows that US data also lacks pinpoint accuracy.