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One of the factors restraining inflation in the US has been the low prices on imported goods coming from Asia. Wal Mart's CEO has a good insight into future price increases using its greater than $400 billion pipeline of products that it is purchasing from around the world. He does not believe that retailers will absorb the price increases and that they will pass on the increases to consumers. China, for example, is worried about wage inflation and it may have to pass on some of this cost to its importers. Other country's in Asia face similar inflation problems.
Historically, wage inflation has been the biggest source of concern about US inflation. Many economists play down the risk of US inflation in an economy with high unemployment and low growth in wages. It appears, however, that rising inflation in Asia may erode one of the factors that have held retail prices down in the US.
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