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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: TobagoJack who wrote (44110)12/31/2003 8:16:07 PM
From: elmatador  Read Replies (1) of 74559
 
Inflation can construct instead of destroying. If you can keep your assets inflated against the ones who can't protect against inflation you can get immensely rich within inflationary period.

Inflation, in this case., is no more than a tax on the individuals who can't protect or hedge against inflation. In short, you're taking from them (the ones not protected against inflation).

That's why the world always needed cheaper commodities. Producers of cheaper commodities could not protect themselves against the inflated industrial products that have to import, always having deteriorated terms of trade.
It always needed more bags of coffee, cocoa of barrel of oil, to import the increasingly costlier machinery, power stations or chemicals.

Teh first time this had a correction was when the OPEC inflated oil prices by 1973 and again in 1989. (Pity that pezz don't read more than two lines of my texts). Inflation can be exported this new year, if commodities rises as the whole world kicks up into growth. My point was in posting Message 19640739 that the raise in prices of commodities last year was only with SEA and China growing, if the rest of the world would kick start -a little in LATAM a little in Euro zone and Japan or even with the US not stagnating- prices of commodities would zoom skywards.

This would cause the importing countries to import inflation -via higher commodities prices- even though they would be deflating via cheaper products churned out by China and other Asian countries.
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