SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TheSlowLane who wrote (8963)2/29/2004 12:54:24 PM
From: russwinter   of 110194
 
Just another aside on the US wholesaling and manufacturing Train Wreck. You could very well start to see these PMI and ISM indexes starting to drop off. But, it won't be because of slack consumer demand at least initially. It will be because intermediate and finished goods producers just can't get input goods, or because inputs goods far outstrip any profit they might make. This is going on big time in Asia too. The whole system seizes up. Because of the leverage, it will cause large scale bankruptcies. There won't be any point in being in business if 1. you can't get the goods at other than rationed prices. 2. you lose money in your operation. Some firms may be able last a month, others a few, the big boys might survive, but the landscape will really change rapidly. There just aren't the backup inventories around to see them though. Add a problem in Venezuela and I just can't imagine.

All these countries will scramble around and try to protect their firms. The US might restrict scrap exports to Asia, tariffs will be dropped (China and Korea already did that on metals), the Chinese will repeg to try and bring down USD based commodity prices in local terms, but those are just stop gaps, does nothing to solve the shortage problem. Equilibrium finally arrives when economic activity (the boom) is reduced by shuttering the players and large parts of whole industries.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News