Inflation is a process, not an event - Part I: Three inflation fallacies → itulip.com/forums/showthread … post171585
But, let’s not forget “Chapter 16: Fuzzy Numbers” from Chris Materson’s crash course in which he basically says that the inflation figures are “fixed”.
One risk to boost inflation numbers I see is; we (in the west) have continuously moved production to locations with lower & lower costs of production to reduce the costs of our “toys”. This cost reduction was then offset against our other (local) costs to make our overall inflation appear lessened, i.e. the cost of housing & energy increased but the cost of our Flat screen TVs reduced. Now we have reached China which, with its Dickensian labour standards, seems to represent (currently at least) the bottom on the outsourcing/cheap manufacturing stack, any inflation there should now feed directly into our own local inflation to increase rather than reduce our overall inflation. Unless there is an even cheaper location than China? Is there always a cheaper location?
Quite a few manufacturers are shifting production from China to Vietnam. Although, Vietnam alone couldnt supply the whole of the west with cheap manufactured goods.
If North Korea opens up. Manufacturing will shift there. China has it in its power to open up North Korea whenever it wants.
Cheap labour is one thing, the quantity of cheap labour is another.
Population of North Korea is 23 Million, the country can bearly feed itself let alone have spare capacity to make toys for the west. Unless China decides to remove the regeme there.
At what point do people in the west cop on t the fact that the reason for the high unemployment is their habit of buying Chinese goods.
If people are buying cheaper chinese goods that means they have more money in their pockets to save or spend elsewhere, therefore boosting the local and national economy.