From NYTimes.com: Asian Inflation Begins to Sting U.S. Shoppers
First, developing countries now produce nearly half of all American imports. Second, inflation in these countries is coming at the same time that many of their currencies are rising against the dollar.
That puts American consumers in a double bind, paying at least some of producers’ higher costs for making their goods, and higher prices on top of that because the dollar buys less in those countries.
It’s not clear what we can do about this inflation. The Fed is pretty powerless to stop it since it’s based on global demand and rising wages around the world. Normally, a week dollar would make U.S. goods more attractive, but what goods can we export besides commodities or services? Most of the really innovative and new U.S. technology products are manufactured overseas now.