Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

I think the market is missing a major factor about inflation. China. since the mid nineties till China finally let its currency float (well, controllably so), we imported real deflation from China which showed as very subdued inflation (other forces such as energy prices and excess money supply were "balanced out" by "importation" of cheap labor). With China slowly undergoing a process of gradual increase in the standard of living of its population, with an increase in the prices for basic commodities (not just crude), and creeping labor costs in China, I think we are entering a period of secular inflationary pressures, so blips here and there of more subdued numbers are going to be just that, blips, and we should expect few years of creeping inflation to continue, nothing like the 70/80, but still keeping a lid on equities for some time to come.