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Surging food prices accounting for 75% of China's percolating inflation gives rise to the term...

Surging food prices accounting for 75% of China's percolating inflation gives rise to the term skewflation, an increase in one set of prices relative to others. If growing wealth causes spending on food to jump at the expense of other items, this need not be a terrific inflation concern.
Comments (14)
  • Coming to a store near you.
    Shouldn't that word be screwflation?
    Compliments of Big Ben.
    8 Jan 2011, 10:11 AM Reply Like
  • wait till China's buried housing problem hits.
    8 Jan 2011, 10:28 AM Reply Like
  • "skewflation" is a strange term, as I prefer the term biflation - rising prices in what you need, such as food, but falling prices on discretionary items, eg housing, consumer durables. It should be a great concern. PBoC has flooded the economy with liquidity, fueling a massive housing bubble. House prices are beyond the reach of about 80% of those in urban areas, and any attempt to raise wages will merely be offset by rising food and energy costs. This should be a warning to all central bankers (yes, I mean you Ben) that using monetary policy to raise inflation expectations, in order to save bank balance sheets, may not work out as you intend.
    8 Jan 2011, 11:48 AM Reply Like
  • Biflation? what prices are falling?
    8 Jan 2011, 12:30 PM Reply Like
  • most importantly, house prices, CRE, but also flat screen tvs....
    8 Jan 2011, 01:44 PM Reply Like
  • Certainly you can find a period of time where house prices have declined but overall they are an area of extreme inflation on China.
    flat screen tvs - so what?
    8 Jan 2011, 06:04 PM Reply Like
  • Assuming the accuracy of the article excerpt, does this suggest a boon for food staple commodities?
    8 Jan 2011, 11:54 AM Reply Like
  • Who needs food anyway?
    8 Jan 2011, 12:31 PM Reply Like
  • It's not just China.
    =======
    BusinessWeek
    January 6, 2011

     

    A Global Scare in Food Prices
    With drought and flood clobbering harvests, forecasters see significant food price increases in 2011

     

    www.businessweek.com/m...
    8 Jan 2011, 05:01 PM Reply Like
  • I totally agree with nobby73. It's a time of biflation. After biflation comes (high) inflation though, Untill that, commodity prices will continue to rise and housing prices (and other debt related products) will decline.
    9 Jan 2011, 06:17 AM Reply Like
  • So you agree that housing is a source of declining prices in China also?
    We must be living in some sort of parallel universe.
    Housing prices in China tripled (that's 3X) from just 2005 to 2009. They are on target, hopefully, maybe, to decline somewhat in 2011.
    If gasoline goes from $1.60 to $4.00 per gallon, then declines to $3.80, is that a commodity in price decline to you?
    9 Jan 2011, 01:33 PM Reply Like
  • Yeah right, need not be a concern for the few million who are wealthy, but what about the other billion Chinese?
    9 Jan 2011, 01:37 PM Reply Like
  • Maybe not yet, but it could still come. Have you read about the ghost towns? IO think the housmarket in China is in a little bubble, and the demand for oil is increasing. www.dailymail.co.uk/ne...
    10 Jan 2011, 08:23 AM Reply Like
  • Correct, the Chinese housing market is in a bubble.
    Bubble = Inflation
    Demand for oil is increasing = Inflation
    Biflation in China = No
    If you want to find biflation, look no further than the US.
    10 Jan 2011, 08:35 AM Reply Like
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