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

To: KyrosL who wrote (88056)	10/27/2007 10:42:31 PM
From: GST	Read Replies (1) \| Respond to of 110194

The days of cheap Chinese labor are numbered. The workshops in the south where migrants workers lived in dorms are reaching their limit. It is true that there is ample labor to mobilize, but the price will no longer be what it used to be -- it will be more, and it will be in a currency that doubles in value in relation to the US dollar in the next ten years - if we are lucky. As for commodities, I would not agree that their input is small. The bottom line for the US is higher prices -- how high we will only know after the fact. For the average American the prospects are not good at all. We had a really easy ride -- cheap foreign labor, cheap foreign oil and cheap foreign credit. The wind was at our backs. Now we face headwinds and the going will be tougher and tougher. The exception to this rule is the prospects for well educated Americans with advanced skills. They will thrive in the global economy. For the rest, hard times are coming.

To: KyrosL who wrote (88056)	10/27/2007 11:57:29 PM
From: skinowski	Read Replies (4) \| Respond to of 110194

the savings and huge investment in China and the hundreds of millions of Chinese that are still to climb onto the globalization bandwagon bode well for world inflation rates Thanks for the interesting discussion. I agree with the above. The problem is - What can we give them in return for all those cheap goods? The dollar is already under pressure because of the accumulating deficits, and I can hardly think of any area where we could successfully compete with them (to the extent of significantly balancing trade deficits). The same problem, eventually, will have to be faced by all developed nations with their relatively high wages. Deflationary pressures caused by cheap imports cause devaluation of the importer's currencies - and, paradoxically, inflation. How interesting.

To: KyrosL who wrote (88056)	10/28/2007 11:20:57 AM
From: I_C_Deadpeople	Read Replies (1) \| Respond to of 110194

However, commodities make only a tiny percentage of the final price of goods and services. As a generic statement that is probably inaccurate. You have to account for the multiplier effect. A widget is produced and it will cost more when the base material of the widget goes up in price. But it will go up even more when the cost of a building to manufacture the widget goes up in cost and the cost of the utilities to run the machines goes up and so on....