Quote Originally Posted by Witton Park View Post
The China comment may be naive, but it could be taken two ways.

1. Of course China is relavant to the current economic problems. The huge growth there in a country with 25% of the worls's population has put so much pressure on the world's resources. The pressure on Oil, Steel, Coal etc - even items such as rubber is incredible and these commodities have seen huge increases in price over the last 3 - 5 years.
Remember $10 a barrel?

2. IT isn't relevant. CHina has gorn as it was the natural factory of the world - if it hadn't have been - somewhere else would have been - such as Africa etc.
In fact China will soon start to lose as it is becoming difficult to source from in som instances.
China has to compete on the market for it's resources(Oil, metals etc) just like all other countries do. The demand will push up prices to a point, but then the demand will decrease. In other words everything has its price.

BUT if governments start printing money out of step with economic growth (production), to pay for things, then the price of goods must rise. Hence the rapid rise in commodities.

There are other political factors as well(wars etc), but the main reason for rapid price rises is government borrowing. That's why our government is to blame.