Here comes the China liquidity post-sugar high crash. In comments published tomorrow (no, not an Art Cashin brain teaser), a senior government economist said that surging money supply is leading to inflation. Yet, since in China apparently you can be half pregnant (preferably with one and a half boys), the recommendation from the government is to increase reserve requirements instead of interest rates. The implication is that it is only a matter of time before both end up getting hiked.

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