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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Jim Willie CB who wrote (6753)2/2/2004 3:59:43 PM
From: philv  Read Replies (2) of 110194
 
Eventually input costs (raw materials) will be reflected in the finished product. But there is a long lag time, as stocks are drawn down and Companies struggle to find efficiencies and absorb as much of the cost they possibly can. In the end, either the finished product price goes up, or the Company goes out of business. This principal applies to even China.

Raising prices is difficult. No one wants to be first, and there is always the competition to consider. I admit that I have been surprised that prices at Wal Mart haven't yet gone up substantially. But I remember reading more than a year ago about the huge stockpile of goods sitting in Chinese warehouses.

I think price inflation is baked in, and will soon become evident, in spite of the lack of wage increases.

Maybe Greenspan will lower rates even more to compensate and make everything affordable again. <g>
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