Agricultural Bank: Beware of global inflation

"Financial network," a reporter Li January 24, in response to the Bureau of Statistics released last week's macroeconomic data, the Agricultural Bank Strategic Management department issued the latest report and interviewed by reporters, stressed that in the global economic recovery process, inflation will become an important risk, must arouse sufficient vigilance. AgBank believes that the rise in commodity prices is the main driver for direct reasons. International commodities have risen in varying degrees since the second half of 2010.　　This aspect is affected by the supply and demand relationship, the demand for energy from the global economic recovery is bound to rise, but prices will rise as these products are less resilient and the capacity is difficult to increase substantially, and, on the other hand, as they are denominated in dollars, they also push up prices for related products. From the root cause, it is due to the global liquidity glut. Countries in the rescue process have released a lot of money to the market; Emerging economies are well on the rebound, liquidity has entered the real economy, and prices have been boosted; the prospects for recovery in some developed countries, particularly in the US, are uncertain, excess liquidity either stays within the banking system or flows to emerging economies for arbitrage,　　The latter, in turn, drives inflation and asset bubbles.　　AgBank believes that the risk of global inflation should be carefully addressed, while curbing the overheated momentum by raising interest rates, attention should also be given to reducing external shocks by managing capital accounts and recycling liquidity, to prevent inflation from worsening and asset bubbles. (Stock market Weekly feeds)