Today the China Commerce ministry reported their trade data:
-February exports were up 30.8 percent year over year (Y/Y) at US$44.53 billion.
-February imports were down 5.0 pct Y/Y at US$39.92 billion.
-Feb trade surplus at US$4.62 billion is down from January's surplus of US$6.48 billion.
-Jan-Feb exports were up 36.6 pct at US$95.28 billion
-Jan-Feb imports up 8.3 pct at US$84.18 billion.

Goldman Sachs reported that the China trade surplus would add more appreciation pressure on the yuan, but I say it will add more downward pressure on the USD.

The Central Bank of China announced significant increases to money supply. M2 at the end of February was up at the annualized rate of 13.9 pct, while M1 was up 10.6 pct in China, which is needed to support economic growth at those levels.

Money supply growth in the U.S. on the other hand is needed just to service the rapidly rising debt in that country. Is it any wonder why rich and powerful people like Gates, Buffett and Soros are shorting the USD?

Wake up America or it's going to be game, set and match for both the equity and bond markets there, which ultimately will lead to a significant relative decline in living standards.

People ask why I am bearish on America (capital markets) right now, and I say one word, "Stagflation."

It's an ugly word, but get used to hearing it.

BCara@BillCara.com

p.s., I'm off to visit my colonoscopy surgeon for a pre-op exam. I'll be back before noon.