Inflation?
All of the real, and virtual money printing (like quantitative easing) that has been going on for several years now puts upward pressure on hard asset prices.
While the central bankers are trying to fill in the hole created by the collapse of home value when that credit bubble collapsed, there is no sensible way to make all those people whole, without taking that wealth from people that did not participate in the bubble. Inflation is a tax on savers that benefits debt holders and spenders.
it seems the politicians really believe their own BS as they argue the job benefit of temporary government stimulus spending. You can't fill the well by priming the pump. We will not dig ourselves out of this slump and increasing deficit without >4% "Private economy" growth. Growing the public sector is just a sea anchor that reduces our total national wealth.
At the moment I am noticing a strengthening dollar, which is somewhat a consequence of other central banks cranking up their easing, similar to the beggar thy neighbor currency devaluations back in the '30s. Even Switzerland is printing money, and Japan is actively driving down the Yen to help their exports.
Today with the more tightly linked economies, these central bank moves are less effective. One talking head on TV observed that this international easing is fungible, so the inflation is not limited just to a few nations.
At some point we need to man up and shift out of crisis mode, take our short term medicine to withdraw the sugar high from government borrowing and spending, and free up the private sector to start growing. We have a huge opportunity to develop our new found energy resources (we can become a net energy exporter and that would help our trade balance and dependance on the middle east). Our tax code is past due to clean out the crony capitalism tax breaks and promote growth for smaller and mid size businesses.
If we want to reduce all the money buying influence on politics, remove the honey pot that attracts the money. If we reduce the invasive regulation that big business lobbies to game for their own advantage, and reduce the out of control spending that attracts all the suckling pigs to DC, there will be less influence to buy. We can't legislate against people acting in their self interest, but we can remove/reduce the prize they are chasing after.
Still far from resolved is the issue of rising health care costs. Replacing a broken single payer insurance system with a single payer government system, does not address the fundamental problems. Spreading the costs to make younger/healthy people pay for older/sicker people will reveal itself as flawed soon enough (within next couple years). We can't fix this until enough people realize, that it isn't fixed yet... (I sure wish I was wrong.)
Back on topic, I've noticed a faster/higher increase in shipping costs. The parts cost for modern SMD seems reasonable, while I haven't made major buys in last year or so. Processor families keep getting more powerful faster than costs increase.
JR
PS: yes wages have been increasing in China. They just celebrated their New year's a major travel holiday for them when migrant workers return home for the week. I've seen reports of as many as 25% of workers in some factories not returning, mainly over dissatisfaction with pay. Hon Hai one of the big dog contract manufacturers has started a hiring freeze because apparently they got back more than they expected. Hon Hai has been pretty aggressive about increasing worker pay for the last several years.
