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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 (36573)	7/22/2005 4:41:06 AM
From: GST	Respond to of 110194

<Our old closed-economy models have been rendered increasingly obsolete by the emergence of far more powerful cross-border influences on pricing. As a result, in making inflation calls, we now need to pay less attention to country-specific shifts in unemployment and capacity utilization rates. Instead, we need to focus more on the global balance between supply and demand that shape the far more open models of globalization> I think Roach is 100% correct with respect to the relative importance of globalization over domestic considerations, especially for the USA -- but then I think he is 100% wrong in concluding that the effect is likely to continue to be deflationary. He is looking in the rear view mirror. He is looking at the period of globalization that road the wave of cheap credit, cheap oil and cheap labor. That period is to be short lived as we transition to scarce oil, scarce savings and labor that is no longer going to be cheap -- at least not in the way it has been in the global market for the past few years.