Permanent increases in the monetary base foreshadow eventual increases in inflation that can increase, rather than reduce, unemployment.

If oil prices continue to rise and the RMB continues to appreciate, the U.S. inflation rate may increase at a faster pace in the near future. And this would have an unwelcome impact on consumers’ wallets.

Oil price shocks appear to have only transitory effects on headline inflation and virtually no impact on measures of underlying trend inflation.

The United States can simply recycle the financial capital inflows from China and re-export them back to China in the form of FDI. In so doing, the United States gains a substantially larger rate of return from FDI than China does from owning U.S. government bonds.

Weak lending may still be the culprit behind low inflation, but monetary aggregates may no longer closely track credit conditions.

Okun’s law can be a useful guide for monetary policy, but only if the natural rate of unemployment is properly measured.>

Significant store-of-value demand for housing suggests a bubble that could burst, especially when both the household income growth rate and the savings rate start to decline and capital controls in China start to relax.

We merely want to see whether, historically, fast growth of the monetary base has been associated with faster growth of real output.

The important point is that both the Chinese trade surplus with the United States and the amassed foreign reserves result from the savings decisions of Chinese consumers.

Credit and M2 may be driven simultaneously as part of a broader financial intermediation process; a common underlying factor may be the interest rate