Why the Great Labor Arbitrage is Coming to an End…

Needless to say, with Chinese wages and costs rising rapidly and the arbitrage gap nearly closed, there is not a snowball’s chance in the hot place that the black line in the chart above will take another 40% dump lower. Not in a million years.

And that means, in turn, that the yawning gap in the above chart between goods deflation and services inflation will not recur. As it happens, the underlying services inflation is still in the +5% Y/Y range and will dominate the topline price level going forward far more heavily than it did during the aberrant era of 40% durables deflation.

Accordingly, the "lowflation" excuse for money printing is now deader than a doornail.

The fact is inflation isn’t and won’t be contained even at the Fed’s specious 2.00% target. And the last two decades have proved beyond a shadow of a doubt that aggressive money printing does not spur domestic investment and productivity, and therefore overall economic growth either.
https://internationalman.com/articles/david-stockman-on-why-the-great-labor-arbitrage-is-coming-to-an-end/