Re: " I think I can sum it up by saying that these economies, and I mean all of them are a very long way from what you know of to be economies of competition where people make decisions based on quality, quantity and price. Those conditions are only true in North America (above the Mexican border), Western Europe and Australia-New Zeland. EVERYWHERE else, where 4/5 of the world's people live, economic goods and services, from products to capital are allocated based on who knows who and who pays how much. What you think of as the good-old-boys network doesn't even come close to describing what goes on here. Sometimes the distortions are done in the name of preserving culture (Japan is notorious for this one.)."
Jess, you are right all along. However, if Japan and Korea (and also China) could no longer take the lead in Asian economy, things could change dramatically in the next few months. The buying power in these countries, and especially the South East Asian countries, where Japan and Korea often dump their products have eroded considerably in the past year (and has become worse in the past few months). My thesis is that there will be a lot of products (more than usual) from Asian countries that will flow to the US in these coming months. While in the US we will be spending about $260 billion for this coming Christmas, we will soon find out that these products will be getting cheaper all the time, perhaps 30% to 40% less expensive than they used to be. While this is good for US buyers, it may not be good for the US market and economy. This could perhaps be the start of a deflationary period.
Today, the 4.7% unemployment, the lowest since 1973, at the time where inflation is in an all time low, caused me to believe that Phillips curve no longer holds (although perhaps, it has not been holding for a while already). However, I am still betting on the fact that revolution in the information technology sector has caused this anomaly. And if this is the case, it will certainly be good for Cymer in the next couple of months. We certainly appreciate it if you could keep watching the Asian market from Hongkong.
God Bless |
