If you're thinking at all about inflation and China, this piece by @ByrneHobart is a fantastic read.
"There was a vigorous debate in the 90s about why inflation had dropped so much. One school of thought credited Greenspan...But a lot of it was Deng Xiaoping and Malcolm McLean."
"There was a vigorous debate in the 90s about why inflation had dropped so much. One school of thought credited Greenspan...But a lot of it was Deng Xiaoping and Malcolm McLean."
"something interesting happened in the 90s and early 2000s: commodities price spikes didn't get passed through to consumers."
"the higher cost of components was offset by the lower cost of the people who turned those components into finished goods."
"the higher cost of components was offset by the lower cost of the people who turned those components into finished goods."
"if you want to compete with Shenzhen's human and institutional capital—the people, the experience, the dense network of suppliers—step one is to start about thirty years ago."
"Over the recent lifetime of the low-inflation, bonds-inverse-to-stocks, paradigm, that big input has been a shift of manufacturing to China. But that shift is reaching its limits, even absent policy changes in China"
"This doesn't mean inflation is inevitable, but what it does mean is that the long deflation, and its effects on asset price correlation, will peter out over time. ...inflation will likely be more volatile... some of the easy diversification strategies will stop making sense."
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