There is evidence that the sharp increase in commodity prices is filtering through consumer prices.

The car salesman had done his job and the client was willing to buy this apparent bargain. After all, with so much to liquidate in a poor market, it had to be priced to sell.

China’s central bank surprised the market on October 19 when it raised interest rates 25 bps in spite of a slowdown in GDP growth to 9.6% in Q3 from 10.3% in Q2. Given that the previous 2002-2007 cycle growth averaged 10.3%, China’s economy is nowhere near overheating.