Inflation in China

Chinese consumer prices eased in July,the National Bureau of Statistics reported.Food costs didn't rise as much as they had previously.The Consumer Price Index rose 6.3 year over year,while food rose 14.4-down from 17.3 in June.The overall CPI had declined from 7.1 in June,and was the lowest it had been in nearly a year.In contrast,the Producer Price Index was up 16 in July,probably reflecting raw materials costs to businesses in China.The Chinese economy is expected to grow 8-10% in 2008.

Please Note

Because of an appointment,I may not be in next Wednesday.In that event,I will try to post another day.

Nature Note:Deadwood

I've been cutting deadwood out of my Leyland cypress trees.I just cut the brown parts out and leave the rest of the dead branches for the birds to perch on.I had let it go for a while,but it got to an unsightly extreme.The cause of the browning is unknown.It could be a parasite or just dryness-or even both.Recent summers have seen a number of droughts.The Leyland cypress is from a hybrid of the Nootka and Monterey cypresses that occurred naturally in an English garden.It is used for a Christmas tree in the southern U.S. and very widely planted for a fast-growing screen.

The World of Gold

Jewelry demand drives most of the annual trade in gold,says George Milling-Stanley of the World Gold Council,but it is investment demand that sends gold prices higher.Gold prices have been following oil because of their inverse relationship to the U.S. dollar,not to each other.Gold is accumulated,not consumed;that's why it is a form of money.Despite adverse economic conditions,jewelry demand was up in Q2.India produces 25% of the annual demand for gold.Global dollar gold demand reached new heights in Q2.Gold has an excellent 6,000 year track record as a hedge against inflation and geopolitical tension,making it desirable to hold in a portfolio.

Nature Note:Cool Cut

It was amazingly cool this morning.At 6AM,it was 55F-or about 12.6 C.Sitting on the deck yesterday,I watched the cold front blow in.The clouds were being pushed by a northwest wind.All summer has been like this.I can't remember having so many cool breaks in the Mid-Atlantic region.When I thinned my Asian pear tree out this morning,I didn't sweat at all.It might as well have been September.There is no sign of global warming in the region this summer.

ECB Holds Steady

The European Central Bank has held its key interest rate steady,having raised it a quarter of a percent in July.Jean-Claude Trichet,head of the ECB,said that there are upside risks to price stability over the medium term.The data underpin the July rate hike.The high Consumer Price Index will likely be more protracted than is supposed.On the other hand,growth will be particularly weak in Q3,and the ECB has no bias on rates.The bank is focused on bringing down inflation even as growth slows.In the Euro-zone,business and consumer confidence were at their lowest in more than five years,at a reading of 89.5 for July.

Nature Note:Primrose Path

The evening-primrose is in bloom.You see the yellow flowers open in the early morning;they wilt later in the day.The flowers attract the ruby-throated hummingbird,but I haven't seen that little visitor as of yet.It will drink the primrose nectar through its long,slender bill.Hummingbirds also like red flowers.Evening-primrose is a wildflower that prefers dry or sandy areas.

Nature Note:Dry Summer

It's been a dry summer so far.The lawn stopped growing at the end of June.No one is complaining about that.We've had a lot of thunderstorms,but they only rain a tenth of an inch or so-that's about .25 cm of rain.The weather is as dry as a cicada's song.The dogday harvestfly,a kind of cicada,started singing here just this morning.They'd been singing farther west for some time,their song gradually moving east.It's an eerie rattle.

Two Worlds

According to Jim Owens,CEO of Caterpillar(CAT),we're seeing a bifurcated world.While Europe and Japan are slowing markedly,the emerging markets are doing extremely well.Their explosive demand continues.We have long been a champion of global engagement.It's important to continue with trade liberalization,opening markets to American exports.We export a lot of mining and construction equipment to Colombia.We really need to cultivate trade relationships.We are a large net exporter to China.Since the North American Free Trade Agreement,real Gross Domestic Product growth has accelerated in all three signatories-the U.S.,Canada and Mexico-Mr.Owens pointed out.