Quote:
Originally Posted by McMack
I wish I had saved a link to the web site, but I found a graph recently that showed that the overall commodity index was almost triple its 2001 low. At the same time, there has been a massive increase in the money supply. Under these conditions we should really be seeing hyperinflation, but inflation remains relatively tame.
What I have begun to wonder lately is whether it's not so much that the value of commodities has gone up, it's that the value of everything else (and principally, labour and anything with a labour component) has gone down. This would be the natural consequence of globalization, in a global market where there is an excess supply of labour.
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There has been hyperinflation - just not here. China and India are both experiencing massive inflation over the past few years - but thanks to their massive trade surpluses, they have the funds to cover up the deficiencies in their markets.