Play this dynamic chart to get more details about recent inflation number.  This is the US inflation.

Wall Street Journal reports that China’s headline inflation may spread:

Within China, there are also signs that price rises, so far concentrated almost entirely in food, are now spreading to other goods and services. That could be worrisome to policy makers, who have repeatedly declared that their main goal is to prevent isolated food-price gains from turning into broader inflation. Among the risks: Inflation could weaken the consumer spending that has helped support economic growth.

The increase in China’s consumer-price index excluding food accelerated to 1.8% in March, after hovering at 1% or less for almost all of 2006 and 2007, according to the National Bureau of Statistics. The acceleration likely reflects how higher wages and raw-material costs are feeding into price rises for a broader range of goods, phenomena that have global implications given China’s importance as a supplier of many products.

Another contributor is higher rents, thanks to continued price rises in most urban-property markets. J.P. Morgan economists expect nonfood inflation to continue to speed up to an average 2.5% for all of 2008.

Very imprudent policy…danger of being perceived as neo-colonism. Why is this better than just importing food?

More sensible policy alternatives would be to focus on providing more incentives for Chinese farmers to upgrade their farming technology and improve productivity on China’s home land.

Chinese companies will be encouraged to buy farmland abroad, particularly in Africa and South America, to help guarantee food security under a plan being considered by Beijing. A proposal drafted by the Ministry of Agriculture would make supporting offshore land acquisition by domestic agricultural companies a central government policy. Beijing already has similar policies to boost offshore investment by state-owned banks, manufacturers and oil companies, but offshore agricultural investment has so far been limited to a few small projects. (source: FT)

At the beginning of 2007, China began quoting the Shanghai Interbank Offered Rate (SHIBOR) as part of its financial market reform programme with a view to implementing a market-based interest-rate regime. Official sources say the use of SHIBOR as a reference rate has clearly increased. However, use of SHIBOR varies significantly depending on the instrument and the matur-ity. SHIBOR rates are mainly used at present as a refer-ence rate for contracts of less than three months, which illustrates the actual thinness and underdeveloped state of Chinese financial markets.

Martin Feldstein writes in the Financial Times: Misleading growth statistics give false comfort

Prepositions matter. The recent government report that US gross domestic product increased 0.6 per cent in the first quarter was very misleading. It implied that economic activity was rising in January, February and March. But the increase actually refers to the rise from the average level in the fourth quarter of 2007 to the average level in the first quarter. Monthly data since January indicate that economic activity and GDP have been declining since the start of this year.
…
Although the government does not provide monthly estimates of GDP, Macroeconomic Advisers, a private forecaster, constructs them … Although GDP declined during the first quarter, the average of the monthly figures in the first quarter ($11,711bn) is higher than the average of the monthly figures for the final quarter of 2007 ($11,675bn).

Now people should think hard about alternative energy. This is one of few area I actually think higher tax actually will do good. 
 
 
 
 
 
 
 
 
 
 
 
 
source: wsj