The Debts of the Lenders: Chinese Minstry Denies Inflation is Occurring Even As M2 Rises 29%

If that were the case, then why is the government increasing purchases of food stocks (the most volatile component of inflation - especially for emerging market nations). In other news, the Fairy Godmother is leaving coins under children's pillows.

China NDRC: Money- Supply Growth Unlikely To Stoke Inflation

The recent rapid growth in money supply is unlikely to stoke inflation despite a rise in agricultural-product prices, the National Development and Reform Commission, the country’s economy planning agency, said Monday.

“In a situation where overall demand is insufficient, particularly one where there is relatively severe excess capacity in some industries, the possibility that a fast increase in money supply would by itself lead to inflation in the real economy is rather small,” the commission said in a
statement.

At the end of November, M2 money supply was up 29.7% from the level a year earlier. Domestic grain and edible-oil prices are unlikely to fluctuate much as government has sufficient reserves, it said. “The government has decided ...to continue to increase the minimum purchase
price for rice and grain in 2010,” the commission said as it vowed to keep buying soybean and corn next year.

The commission also said soybean imports will reach a record high in December, but didn’t provide a detailed forecast. It isn’t necessary to adjust domestic oil-products prices, it said, as the 22-day moving average of a basket of international crude prices is up only 1.85%.

Source CME News For Tomorrow