Another month and another massive deflationary print for Chinese Producer Prices. Year-over-year, PPI dropped 5.3% (‘better’ than the 5.3% drop expected and the 5.9% plunge last month) making this the 47th month in a row of deflation with mining’s collapse picking up again to -19.8% YoY. On th emore worrisome side, CPI rose 1.8% YoY, below expectations of +1.9% but still the hottest consumer price rise since August (and this was amid the greatest credit binge in history) driven by the biggest jump in food prices since 2013.

47th months and counting of PPI deflation… (all that stimulus is not helping)

But it is Consumer Prices that are more worrisome for the “gimme moar easing” brigade as the headline CPI hit 1.8% YoY – th emost since August, driven by a 4.1% surge in food costs – the most since Dec 2013…

And the blame for missing expectations – well they learned that from the Americans…

• *CHINA M/M CPI AFFECTED BY COLD WEATHER, CHINESE NEW YEAR

The month-on-month rise in CPI was affected by cold weather which lead to a rise in vegetable and fruit prices, as well as a pork price increase over the Lunar New Year holiday, the National Bureau of Statistics said in statement.

So to summarize, apart from New Years, Weather, and Pork prices, amid the biggest credit binge in recorded history (China January TSF rose half a trillion dollars), PPI continued to limp towards its deflationary hell and PPI missed expectations.. The trouble is of course that with protests already seen in the streets, social unrest will escalate dramatically if food prices start to soar even more.