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Those who think inflation is caused by too little pork rather than too much money are wrong.”

As a result, China and the Gulf are importing a very expansionary US monetary policy at a time when their economies are growing rapidly and inflation rates are picking up.

The US slowdown and associated series of rate cuts have just made the cost of dollar pegs a lot more visible now

And if you think that China's inflation stems from too much money rather than too few pigs* (or too little rice), that is a problem. The only solution, as Michael Pettis emphasizes, is a big one-off revaluation that changes expectations.

What is occurring is the meltdown of the biggest pyramid game in human history.

The right course of action is for the US government to establish a Resolution Trust Corporation to take over failing financial institutions, including hedge funds and private equity firms, and leave the Fed to tackle inflation. But a Republican administration could not go to a Democratic Congress for money to capitalise such a corporation. It could not justify spending US$1 trillion to bail out those who deceived investors around the world and destroyed the finest financial institutions in America for their own gains. Instead, the Fed will be called on to save the financial system, boost the economy and suppress inflation at the same time.

I would suggest that China's January reserves data provides an equally compelling case for a reconsideration of the world's global monetary architecture. An international monetary system that requires this kind of official intervention - and likely will lead to more inflation in the emerging world than the emerging world wants and more government ownership of financial assets in the US and Europe than the US and European public wants -- strikes me as hard to sustain for much longer.

China added $55b to its reserves. Saudi Arabia added $18b to its foreign assets in January. Those two countries combined to add around $73b to their central banks portfolios. That means that those two countries alone could have supplied the $62.5b a month the US needs to sustain a $750b current account deficit and still had a bit left over to buy euros. Or they could have provided enough money to finance capital outflows from the US along with a current account deficit.It kind of makes you wonder why the US goes through the motions of selling Treasury and Agency bonds on the open market rather than doing direct placements with a few big central banks.

美国人感受到了通胀，但通胀的冲击并不强烈。2008年1月美国CPI同比增长了4.3%,但主要体现在能源上涨19.6%,其次是和能源相关的交通上涨了9.4%,食品价格上涨为4.9%。通胀在日常生活中，尤其是衣食住中的反应并不显著，美国人也并不因此忧心忡忡。

而同样面对通胀的中国，1月CPI同比上涨7.1%,其中食品价格同比上涨18.2%。猪肉等必须品的价格的大幅变动已严重影响普通人的日常生活。和通胀一起爬坡的是中国人的通胀恐慌。这是中国通胀阻击战中的大难题：民众预期。仅就此一端，中国这场通胀之战的艰巨性，非美国“同侪”可比。

2005年，美林的房地产经济学家David Rosenberg提出，当房地产市值超过GDP的140%时，当地就进入“警惕区”。经济学者谢国忠搜集的数据，美国家庭与非盈利组织持有的房产价值，在2007年二季度达到了GDP的168％，而历史平均水平约为100％。在之前的房产泡沫中，这一比例从未超过140％。那么如果需要三年时间使市场正常化，而每年名义GDP增长6％（包括2％的实际增长率和4％的通胀率），房产价格仍 需下降30％，才能使其价值回复到100％GDP的水平。4％的通胀率是无法挽救美国抵押贷款者的。因此美联储完全可能得容忍更高的，甚至两位数的通货膨胀率。

中国政府一直不愿通过加息来抵御通胀，担心这样会吸引更多投机资本流入，加大抵押贷款者的压力。