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

To: mishedlo who wrote (14921)	11/5/2004 10:20:36 AM
From: RealMuLan	Respond to of 116555

Looks like something has to break<g>. And here is a long article on China and its currency value: Part 1: "... The issue is not whether Asian central banks will continue to have confidence in the dollar, but why Asian central banks should see their mandate as supporting the continuous expansion of the dollar economy at the expense of their own non-dollar economies. Why should Asian economies send real wealth in the form of goods to the US for foreign paper instead of selling their goods in their own economy? Without dollar hegemony, Asian economies can finance their own economic development with sovereign credit in their own currencies and not be addicted to export for fiat dollars. As for Americans, is it a good deal to exchange your job for lower prices at Wal-Mart? ..." atimes.com Part 2: "... A few months earlier, China was blamed by Western economists for exporting deflation through an undervalued currency. Now China is being blamed for exporting inflation also through an undervalued yuan while the Chinese currency continues to be pegged to the dollar. Yet China does not have an export economy; it has a re-export economy. Most of the factors of production for Chinese exports are imported, such as capital, raw material, infrastructure systems, energy, capital equipment, design, financial services, machine parts, intellectual property licensing, offshore distribution and sales, the only exceptions being labor and raw land. China's trade deficit widened sharply in April to $2.26 billion from $540 million in March due to the growing demand for raw materials and energy resources. That was the fourth consecutive monthly trade deficit this year. Exports rose 32% in April, compared with a year earlier, to $47.1 billion, and imports jumped 43%, to $49.4 billion. In the year's first four months, China's exports reached $162.74 billion, up 33.5% from a year ago, and imports rose 42.4%, to $173.5 billion. China incurred an overall trade deficit of $8.4 billion in the first quarter of 2004. The January-April deficit was $10.76 billion. If anything, China is importing inflation that is now at a 5.3% annual rate. Much of China's inflation comes from commodity and energy imports, the prices of which are denominated in dollars and set outside China. ..." atimes.com

To: mishedlo who wrote (14921)	11/5/2004 10:45:48 AM
From: zonder	Respond to of 116555

"Quality of jobs" (i.e. their pay) in the US will go down over time, and that will not be because of an "imbalance". It will be in the name of BALANCE (between life standards of, say, an Indian and an American) thanks to advances in communication technology erasing the necessity to employ people close to your base of operations. I guess you know by now that I don't share your opinion of the ongoing deflationary spiral etc which the rest of your post goes into, and I know by now that there is no changing your mind on this, so I will just leave it at that :-)

To: mishedlo who wrote (14921)	11/5/2004 12:32:44 PM
From: marginnayan	Read Replies (1) \| Respond to of 116555

RE: Japan UK based Asset Management Company's Investment Summary Report on Japan • Japan is in a different cycle and believes the economy is in the process of reflating • Japan’s corporate debt has already been restructured in contrast to the UK and the US • Corporate debt as % of GDP is the lowest in case of Japan • Corporate restructuring has driven down labour costs • Employment has hit its low Japan’s corporate profitability: • Earnings are the key driver of the stock market • Profitability set to reach the 1989 high Japan’s corporate free cash flow: • Unlike the late 1980s, free cash flow generation is strong • Thus the corporate recovery is far more sustainable