If inflation returns it will surely come from excessive consumption beyond the means to produce the products.China's ability to produce consumer goods at very low prices must lead to shortages of raw materials.We are seeing that already in the iron ore market and nickel.These shortages will find their way into price increases at the point of sale,hence inflation.China has the capacity to produce the goods but raw materials are more difficult to find and produce.The recent protests in Hong Kong could spread to greater China which could threaten supply.Perhaps the recent interest in Africa is not necessarily from a humanitarian angle.Keeping interest rates low is a battle that has its ups and downs.....are we heading for a down?
