Jim Jubak: Inflation is Back! Worldwide!

Tuesday, February 26, 2008 22:34
Posted in category The Big Picture

for the last 18 months or so I have been a fan of Jim Jubak’s work over at MSN money, particularly when he is tying in China, and this youtube clip is no different.

What is interesting is that he has tied a few events, surely just a fraction of the dynamics, to show how linked we are and how large of a role China is playing in the overall picutre.

Where I do have reservations, questions, is in the numbers though and I hope readers will comment on this.

Inflation is a measure that can be gamed, as reflected in previous posts, however my current question/ issue with the recent debate is that the figures being thrown around are based on year-on-year rather than taking any longer focus.

So, US inflation is 4.3% from last year, China’s is 7.1%.

Where I think this is important, and where I think we should move the frame, is that for years China was “exporting deflation” right? So, why not take a 10 year look at where prices have gone, and look at that impact rather?

Perhaps that requires a complete rewiring of economic theory, but it is not the first time I suggested a change in how we look at the numbers.

Enjoy the clip (3 minutes), and see why I titled this blog All Roads Lead to China

[youtube width=”425″ height=”335″]http://youtube.com/watch?v=q5DzRDxq6WE[/youtube]

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