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

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To: Umunhum who wrote (36567)	7/22/2005 3:16:10 AM
From: mishedlo	Read Replies (1) of 110194

This may be hard for inflationists to swallow but here it is in black and white in an article by The Independent. Factories cut the prices they charge their customers last month despite a record surge in raw materials costs, putting their profit margins under pressure and clearing the way for a cut in interest rates next month. Official figures published yesterday showed that manufacturers' input costs rose at the fastest pace in June for almost two decades. Jonathan Loynes, the chief UK economist at Capital Economics, said: "This is good news for high-street inflation, but not for profits. Producers are having to absorb the bulk of the ongoing rise in costs rather than passing it along the supply chain." ========================================================== Hmmm oil has gone from $25 to $60 and factories are cutting prices. How about that! That is not inflationary in my book. Seems like demand has fallen off the cliff in the UK, and it all started with a slowdown in housing. globaleconomicanalysis.blogspot.com Now uhmuhnum do you care to tell me what can not happen 1) about oil? 2) about rate cuts and a falling currency? 3) about rate cuts, deficits, government spending and tax revenues? Supposedly three "logically twisted" things that can not happen seem to be happening as I type. Did I forget to mention a huge rally in UK long term bonds? Please explain that impossibility as well, especially in light of 1, 2, and 3 above. Is Japan and China buying massive amounts of UK treasuries? Is the Carribbean buying massive amounts of UK treasuries? The same scenario will be coming soon to the US. A housing bust will start the ball rolling. Mish

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