According to an article by Jim Mubak on MSN Money, the Chinese are exporting inflation to the U.S. And that’s not all that funny!
For the last decade or so, the U.S. was riding the wave of the Chinese economic boom. The benefit of the rapid growth of the Chinese economy was a better than average economic growth in the U.S. along with a lower than average inflation.
That’s also an antithesis because that rarely happens and if it does, it doesn’t last very long.
And now the time has come when the U.S. has to kow tow to higher inflationary pressures as soaring inflation – not to mention the recent quakes and natural disasters – is taking a toll on the Chinese economy.
With oil predicted at $200 a barrel some time very soon, its no wonder that Jubak’s theory is in fact quite sound.
And it has long been a conundrum that the Greenspan years produced better than average economic growth that coincided with lower than average inflation. And now that puzzle is solved!
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