More on Inflation

http://business.timesonline.co.uk/tol/business/economics/article3156141.ece
I have been on this theme for almost six months now and I am finally starting to see it mentioned here an there in the press. China's next big export will be inflation. This is from an England publication but it applies to America. It is why I have held the thought that the stock market is telling the better story than the bond market. Time will tell.

From the article

Growing numbers of economists are sounding warnings that rising cost pressures and wages in China mean that it may be starting to export inflation. Analysts fear that the era when Britain and other big Western economies could depend on steadily falling prices for Chinese imports to keep a lid on inflation and allowing their economies to grow faster without sparking price pressures, is ending.

and

The threat of a new wave of China-fuelled inflationary pressures has been thrust on to the agenda by official US figures, not previously available, which show that after years of steep falls, the cost of Chinese exports to America began to rise very sharply last year.

and

The very steep gains in America’s Chinese import bill were fuelled as sharp falls in the dollar cut US buying power abroad. But City economists are now increasingly concerned over signs that the same price pressures from dearer Chinese imports are emerging on this side of the Atlantic.

These cycles, like commodity cycles tend to be very long 10 year plus cycles. We may have a temporary inflation slowdown due to US recession but the wave I think is coming big time.