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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (3696)	4/6/2004 12:49:25 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

The Mayline Group is announcing a 3% price increase on all orders placed on or after May 1, 2004. This covers all products sold by the Mayline Company, Kwik-File, and Tiffany Industries. We regret having to take this action, but the escalation of raw material prices has made this change necessary. It's unfortunate we also have to add our voice to the chorus relative to escalating commodity prices. Since the first of the year, we have seen our steel prices escalate by over 30%. Further, we are also seeing significant price increases and/or surcharges on other commodity materials such as wood, corrugate, particleboard, steel components, diesel fuel, natural gas, etc. We have worked diligently in our efforts to find offsetting cost reductions to minimize the amount of this price increase.

To: russwinter who wrote (3696)	4/6/2004 1:02:16 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

but it sounds like you think people (including China) just give up the ghost naturally or by tweaking policy (like China is attempting) a bit? So since our economy is 70% consumer based, what will precipitate our economic bust, just dead weight? No, I think it will be a forced catalyst. China tightened a second time. Unlike the US there is no FNM creating credit at the drop of a hat. If their central bank tightens money supply and decides to cool things down it WILL happen. Right now, a huge chunk of money comes in from FNM and there is no way short of regulation to shut it off. However, falling housing prices will shut down the nonsense as will tightening of credit standards (whether or not interest rates are hiked). Europe is at the stall point as well. Europe heading into recession and China significantly slowing down at the same time will impact the US. A rate hike would ice it, but the tailwinds of refis and tax cuts and business tax credits are ALREADY GONE! I concur with Xie that all we need is a catalyst. Once again it takes TIME for these to take affect. If we run out of steel and copper in the meantime, so what? Seriously. How many people will be out of work if there is no steel or copper to be found? Hiking into that would serve no purpose whatsoever IMO. One final spike in prices and then economic collapse if there are no base metals. Thousands and thousands of people laid off, and housing jobs to boot. Running out of base metals would be enormously deflationary with all the people out of jobs and losing their houses and trying to sell them at the same time. Mish

To: russwinter who wrote (3696)	4/6/2004 1:32:38 PM
From: Tommaso	Respond to of 116555

>> people have to be dragged kicking and screaming towards the rationale behavior of downsizing their standard of living. <<< Maybe not kicking and screaming, but a lot of loud complaining when gasoline is over $5.00 a gallon and shoes made in China cost $85 a pair instead of $50. And a pound of coffee goes to $10 (gourmet to $20), and sugar is $1.00 a pound or more. John Templeton approved of the decline of the dollar. I think I see in that approval a moral judgment of American spending habits. On the bright side, I heard this morning that soybeans have doubled in price over the last year. Anything that rewards American farmers is OK by me.