Ike,..Re:<<so it is not US legs that will carry Japan rather it may be Japans own domestic demand and fiscal cuts plus affect of stimulas.>>
I apologize for being slow but in your post shown below, it was my impression that the US had to remain strong in the near term in order to shoulder the burden of the SE Asian crisis.
If Us has to carry the weight of 'global economic cross' than nothing better then strong legs, some lead is more than welcome.
Message 4972709
While it is true that many consider real US rates high, a look into the current domestic environment may shed some light on why.
dismal.com
business inventories
As long as consumer confidence remains high, the effects of the
Asian economic crisis will remain distant. That having been
said, inventory building is a serious risk to the economy and
could very likely lead to slower job growth in the second half of the year.
dismal.com
Industrial Production
Lastly, the Industrial Production and Capacity Utilization figures released today were almost entirely attributed to the GM strike and the normal summer shutdown of plants for routine maintenance and retooling, not from any manufacturing slowdown due to falling Asian orders.
Finally, while inflation is indeed very well behaved, it is possible that we have seen the lows in this cycle. dismal.com The Asian crisis began last Sept. but finally hit the market in late Oct. That has been 9 months ago and although I understand that US exports to SE Asia are only 12% of total exports, we may have seen the maximum impact already. Our biggest trading partners are Mexico and Canada.
Again, I apologize if I did not clearly understand your message.
Regards,
Lee
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