Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: ild who wrote (31057)	4/22/2005 12:44:48 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Fri Apr 22 2005 12:29 trotsky (CKM, 9:21) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i wouldn't worry about China in this case - after all, it is China that has ended up with all the manufacturing capacity in this game. China's domestic consumer demand will one day eclipse the US demand for Chinese goods by a huge margin. in fact, such a shift toward ever faster growing domestic demand in China is already underway. as an aside, neither tariffs nor a Yuan revaluation will do anything to dent China's comparative advantages in trade ( see the history of US-Japanese trade of the past 30 years for guidance on what to expect ) . as i've explained before, it is complete ignorance about the economics of trade plus a desire to buy votes from an equally uninformed public that drive the current China/Yuan debate. Date: Fri Apr 22 2005 12:22 trotsky (@pm stocks) ID#248269: a sorry spectacle, once again. Date: Fri Apr 22 2005 12:17 trotsky (Alberich, 8:56) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved well, this should be nothing new to denizens of kitco. i first mentioned here that higher oil prices are deflationary in their effect on the overall economy some 2 years ago ( and have repeated it several times since, cum explanation ) . in a deflationary era, every temporary price rise in what are essentially items that are part of non-discretionary spending causes corporate margins and consumer purchasing power to shrink, which puts pressure on all other goods prices. the vast majority of people seems to believe that high oil prices can CAUSE inflation. this is simply sloppy reasoning. price inflation is a consequence of money supply inflation outpacing the growth in economic output. price rises in commodities , even one as important as oil, can not per se 'cause' inflation. since both labor and manufacturing capacities are in abundant oversupply globally, while at the same time the USD money supply growth has slowed to a crawl ( in fact, short term MZM growth has gone negative once again, and annualized growth rates remain at a one decade low ) , there is no reason whatsover to expect inflation. but you don't need ME to tell you that. you only have to look at the 30-year bond, it tells the tale loud and clear. MZM : research.stlouisfed.org