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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (29090)	2/22/2003 7:43:28 PM
From: LLCF	Respond to of 74559

Our friend Faber seems to always show up on the right side of things.... glad to see him join our ship: Message 18614546 DAK

To: TobagoJack who wrote (29090)	2/23/2003 12:01:13 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 74559

I am reminded of two past US examples in the 1980's my old employer Digital Equip Corp (DEC) laid the screws to IBM, building minicomputers with 1/3 the speed but 1/10-th the cost... the big advantage was price-performance, and DEC kicked some major booty, ascending into 2nd position in computerdom but 10 years later, Digital was asleep at the wheel (despite brilliant unheeded protestations from a crack marketing research internal group) when the world of PC's undercut the minicomputer market... they had 1/10-th the speed but 1/100-th the cost (pardon rough ratios) the end result was decimation of DEC's entire business the other example... in the early 20th Century, the United States realized an extreme cost advantage from leaps in machinery in the agriculture industry... mass production came to the agri business... the end result was decimation of the European farming, and domination by Americans in the export farm world CHINESE LABOR ADVANTAGES WILL NEXT DELIVER CRIPPLING REGULAR STEADY RELENTLESS BLOWS TO BOTH USA AND EUROPE it will not end until the Chinese Govt leaders assent to a willing yuan revaluation upward such concession will come only with political costs e.g. Taiwan or North Korea? the end result will be a quantum jump, or series of jumps, in price inflation felt within the USEconomy prices of import components and finished goods will jump with each rachet upward in the yuan I read that 30-40% of WalMart's inventoried product for sales now come from China... personally I think the number might be less, but in some categories this might be true... imagine the damage to WMT earning per share when prices rise and demand slacks this could result in 4-5% CPI initially then 5-7% for a few consecutive years imagine the fallout with longterm corp borrowing rates how about the flack to corp swaps? imagine the fallout to home mortgage rates how about the heavy damage to real estate? this is the path I think we are on / jim