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

To: mishedlo who wrote (9547)	3/6/2004 10:13:38 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

<Do you think it will be easier to pass those costs on when employment is falling off a cliff?> Employment is not "falling off a cliff", it's better described as stagnant. Wages paid to the work force are starting to surge too, up 2.4% annualized in the last three months. Yes, much of the surging PPI costs can easily be passed on, because more importantly than job growth (see previous Noland essay on credit expansion), people are flush with borrowed easy money derived from inflated assets. In fact credit is outstripping wages and salaries by nearly 8 to 1. That in my mind makes new borrowing eight times more relevant to the inflation story than wages and jobs. You are overly focused on jobs as the key ingredient of this Train Wreck inflation brew. That's the wrong focus, it's new credit expansion (and money printing from the BOJ) that drives the demand. Credit expansion must slow considerably to end this inflation outbreak.