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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (90934)	9/30/2007 5:18:51 PM
From: Les H	Read Replies (1) \| Respond to of 306849

Chinese Inflation Not only did consumer prices in China rise at their fastest pace in a decade in August, there's also growing evidence that Chinese manufacturers are able to pass on their rising costs to U.S. consumers. The U.S. Bureau of Labor Statistics reported a 1.1 percent increase in the average U.S. dollar cost of goods imported from China in August, the fourth straight month of accelerating price gains. There are several reasons why Chinese companies are pulling back their discounts. Local wages are rising because of the increased cost of nutrition: Pork prices in China soared 87 percent from a year earlier in August. The backlash against Chinese-made poisonous toys and inflammable clothes also suggests that China's disinflationary potential is now running out. Houdini Trick As consumers worldwide seek better quality in Chinese-made goods, and as regulators insist that manufacturers in that country do more to allay product-safety concerns, Chinese exports will get more expensive. With China's help, George W. Bush's administration has managed to weaken the U.S. dollar without importing inflation. Excluding 2005, the trade-weighted real broad dollar has fallen steadily since mid-2002. But the response of U.S. import prices to the dollar's fall ``has been slow and apparently muted,'' as a Federal Reserve study has pointed out. And while it's difficult to pinpoint exactly what caused U.S. import prices to stay resilient against adverse currency movements, the Fed study noted that those products in which China has increased its presence in the U.S. market have become more immune to exchange-rate shocks. bloomberg.com