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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Silver Super Bull who wrote (5909)	1/23/2004 9:49:34 AM
From: russwinter	Respond to of 110194

Well, inflationary forces are pushing costs up, but as it stands today, easy credit continues to "finance" even more inflation. Should the easy credit contract (not the case today), then companies may not be able to pass on costs. The second element, would be diversion of consumer spending into food and energy bills, a number of $150-200 billion is the one I've tossed out on that. So the easy credit will be used to pay those new bills, thus fully funding food and energy inflation, but maybe not other consumer spending? So today (there's that word again) I suspect costs are being largely passed on by two mechanisms: 1. easy credit 2. Through the cost control mechanism (primarily laying people off, or going offshore). We need to look for the evidence (plenty I think), because all this is happening very fast.