China in future hyperinflation is related with the United States

China in future hyperinflation and the United States.

Decoupling, and with the US's own notes a lack of credit and economic strength, sustaining inflation is in the approximate path since inflation.

China's century of deflation in the 1930s and 1940s by hyperinflation with United States silver purchase Act.

June 1934, United States, through the "Silver purchase Act, authorizing the Minister of finance in the United States and abroad market price until the acquisition of silver per ounce of silver $ 1.29, or the value of the Ministry of Finance of silver reserves reach the gold reserve of 1/3. This leads to global silver prices rose, the then largest real silver standard country China fully tightened. United States tried to upgrade the silver price, let the Chinese become export market of dreams, because China is an economic slump is destroyed domestic market, the need to also become the case.

From 1934 onwards, a large number of silver reserves of China began to drain, export a serious setback, 1934, China's major export commodities exports of raw silk only 1930 21.8% decline in prices of export products in 1926 as a base, Shanghai exports price index fell to 72%, foreign trade turnover in 1933 as cardinality (about 12560 customs two), declining to 1934, 1935, 80% to 76% decline, while imports decreased faster, 77% respectively, declined to 68%, and to last almost became the silver China was the only export commodities, is the largest of smuggled goods.

Solid economic decline in asset prices, 1934, Shanghai's foreign banks sell silver led Government and industrial bonds dropped 10%, Shanghai Center real estate prices fell 15%, industrial bonds declined 7%. Deflation has become a nightmare, China wholesale price index, 1931, 1934, the ratio fell by 23%, down 6.5%, again in 1935, decreases 2.5%, agricultural prices decreased 6.9 1934, 1935, then% decline 3.7%, while at the same time as the credit contraction, 1934, of the market interest rate of 5%, in September when rising to 12%.

Silver standard cannot maintain that the credit currency ". This is the Prime Hook, Western countries would like to see results, increase China's international purchasing power. They forgot, when China was unable to create wealth to feed themselves, the currency appreciation is not active in the trade, but a widespread famine.

Silver system quickly destroyed, 1935 on 4 November, the Chinese monetary system reform took effect. The national Government has worked with the United States, Britain and Japan make multiple negotiations, countries like China's new release of credit currency linked to their respective currency, this will allow China to become their currency dependencies and export base.

The national Government won the first battle of the currency of war, but failed to win support currency entity key battle in war. A song by h., represented by decision-makers successfully financing from Britain and the United States and other countries adequate reserves, not let legal tender and any kind of currency, instead of directly linked to the achievement of the market in a floating exchange rate, monetary policy makers to "maintain the convertibility and exchange rate stability became the national Government's basic policy"; at the same time the Government has implemented a strict balance between budget, increase public confidence in the new currency. This is the success of the currency reform difficult.

But in the real economy, the KMT government misconduct, step by step.