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

To: el_gaviero who wrote (20719)	10/26/2004 10:41:58 AM
From: mishedlo	Read Replies (1) \| Respond to of 110194

The job situation in China MAY be inflationary to China (may be) but it sure is not to the US. He failed to look at wage differences and benefit differences in China vs the US, and he failed to look at productivity increases vs wage hikes in China, and he failed to look at slowing worldwide demand for goods, and he failed to look at what %of costs labor constitutes of the final price and compare that to the situation in the US. So what did he look at? One thing and one thing only: wage hikes in China RELATIVE to current wages in China, and from that he concludes it is inflationary to the US. The more I think about this, the sillier the article becomes. It was an EXTREMELY SUPERFICIAL analysis resulting in a very poor conclusion IMO. As for assets being held by the govt making the situation inflationary is really preposterous. It is akin to the stock market rationalization of "It's not a loss until you sell". Now there may or may not be asset inflation in China but it will not have anything to do with the govt owning them. Once again, will this cause inflation in the US? He made ZERO connection. In fact he made no case for it causing inflation in China either. Mish