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

To: andiron who wrote (88304)	11/1/2007 3:34:33 PM
From: GST	Read Replies (1) \| Respond to of 110194

<slowdown would bring deflation as capacity might have been ramped up for 5% global growth but it slows down to ~2%... big supply , few customers make for a bursting bubble.> Oversupply in China, if there is any, does not mean lower prices in the US. The price depends on the exchange rate. The Chinese currency has now gone up about ten percent against the dollar, and will continue to go up year after year. The input prices China pays will go up in dollar terms year after year after year. Weakness in the US economy means weakness in the dollar, and weakness in the dollar means higher prices in dollars precisely because the US is slowing down.