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China and the United States are in a race for scarce commodities to rebuild their economies after the pandemic. That’s pushing prices through the roof and is now threatening to throw Beijing’s recovery plans off course.
The cost of everything needed for China’s post-pandemic infrastructure boom, from steel and coal to glass and cement, is soaring. The price of rebar, a type of steel used to reinforce concrete, recently hit 6,200 yuan ($965) per metric ton in Shanghai, up 40% this year, and a new record high. Iron ore, which is used to make steel, has topped 1,240 yuan per metric ton ($194) on the Dalian Futures Exchange, a 25% increase
Have Americans forgotten the ghosts of inflation past?
Inflation is not something we’re used to worrying about.
In fact, the only Americans with real memories of runaway inflation and its effect on household finances are likely to be those over the age of 60.
Remember (or don’t): US inflation peaked at 14.7% in March and April 1980, with the economy experiencing “stagflation,” a nightmare scenario characterized by weak growth and rising prices.
The Federal Reserve finally got inflation under control when former Chair Paul Volcker constricted the money supply and sent interest rates higher. Rates on conventional 30-year mortgages peaked at 18.45%, but prices moderated and people dependent on fixed incomes breathed a sigh a relief.