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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (7468)	2/9/2004 3:02:49 PM
From: Jim Willie CB	Read Replies (1) of 110194

Russ, forgive my repeated dated theses (or feces, unsure) as I have said many times, I see strong arguments on each side last week I offered some evidence on Asian products Over the last two years, unfinished import prices are up 20%. Finished import prices are up 6.7% annualized since the start of spring, nearly a 9-year high. Unfinished goods are often called components, the parts within products. Since the autumn, Asian currencies have gained ground against the USDollar. Import prices are now quietly slamming against the back door. It is inconceivable that imported consumer products, a staple among shoppers acting out their retail addiction, will avoid the effects of rising prices. we are starting to see some evidence of price inflation on the finished and unfinished (component) product world perhaps the piece I miss rides in on a plank I built myself Japanese Yen 10-12% appreciation since Sept 2003 this could usher in a pan-Asian currency appreciation many question why the JYen is rising versus the USDollar they point naively to their broken bubble and failed bank system but they overlook the $90 billion annual trade surplus Japan enjoys versus the USA they overlook the roughly $40-60 billion trade surplus Japan enjoys versus China (I dont have the exact figure, just guess) we might see that rising Asian currencies will be the vehicle for introducing price inflation on the product side to the USA if so, then US firms will soon see improved price power I think it will happen in two ways: 1. Japanese Yen hits parity 2. China repegs by 10-15% higher versus US$ (new basket) that would open the pricing gates Russ, I know I often speak theoretically but what in your opinion will be the gating event or gating effect that breaks the price barriers upside? I cite my two above, and await your perspective I know you often mention material supply shortages as always, I highly value your views I am sure you can tolerate my f--g opinion once in a while / jim

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