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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (261216)	4/10/2008 1:40:50 PM
From: TimF	Read Replies (1) \| Respond to of 281500

>> The country that makes high end goods, can shift to low end goods in a pinch Ehem! Isn't this what I objected to several posts back and you said you had made no such assumption? No it isn't. The assumption that I didn't make was that it would be quick and easy to get other sources of production for all the goods we currently import from China. "Easier" doesn't mean "easy". Actually, if in aggregate* it cost $1,000 to build a car in 1950 and it costs $20,000 to do the same today, then you have had a 20 fold inflation.* Only if a car then and a car now is the same thing. If the USS Gerald R. Ford (CVN-78) only cost twice as as the USS Yorktown (CV-5) would that indicate 100% inflation? No it would indicate a decrease in prices. The Ford will be bigger, more advanced, and much more capable than the Yorktown was. You can't reasonably just look at twice the price and say 100% inflation (or look at the actual much larger difference, and use that as the measure of inflation, without considering that your dealing with two different goods.