China's Inflation Hits American Price Tags

New York Times:

China's latest export is inflation. After falling for years, prices of Chinese goods sold in the United States have risen for the last eight months.

Soaring energy and raw material costs, a falling dollar and new business rules here are forcing Chinese factories to increase the prices of their exports, according to analysts and Western companies doing business here.

The rise was a modest 2.4 percent over the last year. But even that small amount, combined with higher energy and food costs that also reflect China's growing demands on global resources, contributed to a rise in inflation in the United States. Inflation in the United States was 4.1 percent in 2007, up from 2.5 percent in 2006.

Because of new cost pressures here, American consumers could see prices increase by as much as 10 percent this year on specific products -- including toys, clothing, footwear and other consumer goods -- just as the United States faces a possible recession.

Read the whole story: New York Times

Comments

[mrcontinental]

11:38 PM on 02/04/2008

There is a problem with trying to measure inflation in a world of changing products. Innovation and technological advances mean we are forever being offered new products which hit the shops expensive, and then both improve in quality and diminish in price as they become popular. (Typical examples are cars, TVs, videos, cameras, home computers, mobile phones etc.). Under guidance from government our public statistical offices regularly introduce these new articles into the indexes as they develop a market presence - in other words right at the top of their price profile. This sets the benchmark for both price and technological performance moving forwards. So if a new improved computer comes out, at half the price but with twice the processing power, the benchmark machine - which is no longer available anyway - is halved twice in the index, once for the price reduction and once for the performance improvement, which makes a full 75% price cut. This continues until the original product is eventually ejected from the statistics and replaced on the grounds that it is outdated and nobody wants it anymore. Of course the time it is replaced is conveniently close to the point at which the replacement machine will be falling in price much more quickly than the original, so the retail prices index ends up incorporating all sorts of products only during the downswing of their price profile, allowing the staples of life (food, fuel, tax) to increase incessantly without causing a ripple in the RPI overall.
The end result of all this book-cooking is that the RPI is not measuring the fall in the value of money at all. It only measures the increase in the cost of living after having taken back the value of every technical advance that's been made.

[olephart]

11:45 AM on 02/03/2008

"Inflation in the United States was 4.1 percent in 2007, up from 2.5 percent in 2006."

These numbers as we all know are a joke. The Fed calculates inflation by cherry picking the numbers they want by the process of substitution. That is, if ground chuck goes up from $2.00 to $3.00, they substitute hamburger that sells for $2.00 and report no inflation. Likewise, if a computer runs at X speed and costs $1,000 is replaced with a new model that runs at 2X speed and costs $1,000 they say inflation fell by half. And they downplay the costs of food and energy as if you don't buy them.

This practice is a result of Alan Greenspan’s efforts to generate politically correct statistics. If inflation was still measured as it was when Carter was in office, the cumulative affect would place the overall inflation about 70% higher over the past 20 years. If it feels as if you are falling further and further behind it is because you ARE falling further and further behind.

[themodernleader]

10:48 AM on 02/03/2008

This fact must be added to the debate on the causes of the Great Depression. Throughout the 1920's there was a depression on the farm and that hit hard a lot of Americans. That condition weakened the economic structure as a real estate bubble developed which collapsed right before the stock market crash. Fortunately, we produced most of our machines and products in rising factories from raw materials mined from our land.
The real estate bubble of the 1920's pales in comparison with the greatest finanical swindle that generated the unprececented real estate bubble of the Bush years.
The gross mismanagement of the American economy has brought us to bankruptcy. Throwing unbacked currency into the hands of the undeserving or deserving will not prevent its collapse but may only slow its precipitious decline.
The wise decision would be for the entire debt to be cleansed through bankruptcy which would preserve the credibility of the currency.The shock and pain would force a change in the present disastrous direction of our economy. New policies and procedures would be enacted towards rebuilding and renewal.
Present Federal bailouts leads to a destruction of our currency and the savings of prudent citizens. Destroying the savings of responsible Americans is tantamount to punishing them for being responsible. Such a wanton policy of the Fed will lead to National destruction and ruin. Look back to the Weimar Republic and its aftermath.
It is clear that the Fed's policy is based in expediency of short term advantage. When a new administration arrives in Washington, That administratrion will receive the blame for economic chaos. The present decision makers will be long gone in hiding and luxurious retirement away from the wreckage and ruin they caused.

[geobushono]

08:57 AM on 02/03/2008

Just a reminder how the Clintons are doing on this 'global leveling'.

http://www.judicialwatch.org/blog/clintons-multi-million-dollar-communist-uranium-deal

[dgscol]

03:12 PM on 02/02/2008

Did you know that kathy Lee Gifford is sponsoring goods made in Chinese sweatshop under a pseudonym?

For shame Kathy.

[vippy]

01:06 PM on 02/02/2008

Well, that shows us that the Bush Tax Cuts are working. How is it working for you? The high gas prices sucked the life out of this economy.
Idiots kept saying the market can stand the high prices as they saw no immediate impact because some people were charging the fill up to their credit card and now they are defaulting on that too. That stupid stimulus package after he announced it the oil shot up
to 29 billion dollars, which will bite us in the behind come summer with $ 5.00 gas. Watch and see and keep voting for the dumbasses running now! Ron Paul would be our last chance but of course he is against abortion so to hell with the economy!

[themodernleader]

10:41 AM on 02/02/2008

The cheap foreign made products are suddenly becoming so expensive that many Americans will resort to purchasing their necessities as used, second hand, through the underground economy.
Free trade has lost us our factories and worthwhile jobs as debts are coming due. How could we have such despicable leaders that allowed this unfolding catasthrophe?
Permitting foreign competitors to control our economy is a mark of treason. It may be said that we Americans were traitors to our own common, prudent interests. We shall pay dearly for this treason.

[jmsent]

10:38 AM on 02/02/2008

Price of Chinese goods is going up because:1. Chinese currency is rising against the dollar. 2. Higher energy prices. 3.High inflation in China. 4. Higher raw materials costs. 5. Pressure from other markets trying to prevent what happened in the USA from happening to them. (It's hopeless). In spite of all this, economists tell us that what is going on is good for us. Welcome to globalization.

[jadez]

08:35 AM on 02/02/2008

this is joke. blame china for the mess our economy is in?....stupid americans.

[bushmocker]

07:29 AM on 02/02/2008

Much as I would like to see a buy American movement blossom as Dandy12 suggested earlier,we don't have a manufacturing base here anymore.We won't start buying second hand merchandise made in the USA anytime soon as long as new imports are so cheap.We as Americans are bombarded by commercials daily to buy this and that.I'm afraid we won't attain the knowledge to fight the problem until we have no money or jobs left for most Americans.This money that's in the pipeline to stimulate the economy will almost all go to China,even if we use the money to paydown our debts,it's all for Chinese merchandise purchased earlier.Instead of doling out 500 bucks apiece why can't we start a national project like building a high speed rail system across America using American made steel and American workers.This would stimulate the economy by providing jobs that paid well,we would have the added benefit of less pollution from airlines and automobiles.Our oil imports would drop enormously leveraging our political dealings with the Mideast.As long as the corporate political donations get funneled to politicians that vote in lockstep with their financial backers we will never experience a Renaissance of American values and Made in America will be quaint memory that fades away after another generation.

[Steamboater]

02:54 AM on 02/02/2008

How could the jusy not convict Snipes? He sent the government bad checks. You have to brain dead not to ask your accountant if your taxes were paid or not too.

[sebocd]

02:27 AM on 02/02/2008

Oh my God! There go the Dollar Stores. Fed don't just stand there, do something quick.

[Novista]

01:54 AM on 02/02/2008

Hahahaaha! does that mean they now have their own New Deal going?

Here in the land of oz, one of the lurks has been tags on items, "Owned and operated by Australians!" Yeah and still made in China. Or Indonesia. Or Mexico!

Twenty years ago, I lived next to a woman who sewed tiny tags in women's dresses slated for an upmarket retailer: "Assembled in Australia." The cartons of finished garments arrived at her place from Taiwan and she added that little bit of Australian content.

[AKJM]

01:52 AM on 02/02/2008

I can recall previous World Trade Summits and how protests broke into riots. I had no idea why they were fighting. As you say industrialist will move manufacture to lower wage locations. Globalization the rich get richer and we all get shafted. I know why protests erupted at World Trade conferences.

[marko77]

12:50 AM on 02/02/2008

All the Chinese products the corporations have flooded America with were never cheap - they have cost millions of good paying US jobs.

Now, this cheap shit we pay for is going up in price. It sucks to be in a country - the US - where only a tiny percentage get rich off of the "Global Economy." Everyone else gets it up the ying yang.