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Inflation

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Inflation

Unread postby jb » Tue Feb 15, 2011 5:23 pm

http://news.yahoo.com/s/ap/as_china_inflation

What do you make of this?

Can this be a good thing if it forces China to open its currency to make US food imports less expensive to ease supply shortages?

Will this create inflation over here? and what will that do to our debt service/ Yow. That's be hitting the fan.
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Re: Inflation

Unread postby FUDU » Tue Feb 15, 2011 8:57 pm

So China needs to boost its fruit & veggie production, hmmmmm? Since we send all our others jobs to them maybe we should send em our illegal alien produce pickers, that we so desperately cannot "live" without.
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Re: Inflation

Unread postby Jumbo » Wed Feb 16, 2011 10:51 am

Inflation seems to be the #1 story lurking behind everything this year. It preceded the protests in Tunisia and Egypt, and now it's causing problems in Europe and China (as the article jb linked notes, inflation could erode the nominal gains of the Chinese economy).

This is one area where the U.S. economy seems to have an advantage over the rest of the world. Because the U.S. is a net agricultural exporter, it is less dependent on imported food for price stability. I suppose that rising global food prices might even ease the trade deficit. Also, with the economy appearing to grow at a slow, but steady pace and slack in the labor market, there is less pressure on wages and prices here than elsewhere. (Fiscal issues lurk in the background, though.)

Of course, although the U.S. is not as sensitive to increases in food prices, it remains vulnerable to oil price increases. I wonder, though, whether the rising cost of food in the developing world may dampen the growth of industrial development there (and keep oil prices from spiking too high, too fast).
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