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

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To: KyrosL who wrote (88056)10/27/2007 11:57:29 PM
From: skinowski  Read Replies (4) of 110194
 
the savings and huge investment in China and the hundreds of millions of Chinese that are still to climb onto the globalization bandwagon bode well for world inflation rates

Thanks for the interesting discussion. I agree with the above. The problem is - What can we give them in return for all those cheap goods? The dollar is already under pressure because of the accumulating deficits, and I can hardly think of any area where we could successfully compete with them (to the extent of significantly balancing trade deficits). The same problem, eventually, will have to be faced by all developed nations with their relatively high wages.

Deflationary pressures caused by cheap imports cause devaluation of the importer's currencies - and, paradoxically, inflation. How interesting.
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