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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (4148)	6/3/1998 1:02:00 PM
From: Lee	Read Replies (2) \| Respond to of 9980

re: Lack of Asia exports It's not deflation, it's not currencies, its El Nino! <<g>> Interesting facts being discussed. Excellent point that it is hard to export from the dead. The weak commodity prices, as discussed, provides solid support for this view. Implications: a) Asia does not export out from the malaise. b) Inflation picks-up in Asia as a lagged result of currency devaluation. c) US labor demand continues to outstrip supply as Asia does not supplement demand for US goods. d) Inflation picks-up in the US. e) An inflationary environment finally seeps into Japan? f) The Euro creates the Euro decade? g) Greenspan's dreams come true If Asia does export more and the demand for US goods fall and therefore US employment and wages stagnate or fall this is bad. The same is true if US competitiveness is hurt by the strong dollar such that demand for US goods fall and therefore wages and employment. We need strong demand in the US. That comes form confidence, which comes from income and job security. If prices continue to fall or stagnate, the labor market remains tight, wages go up, we have real wealth growing for US consumers. Based on the commodity issues we have discussed this is a real possibility. Under this scenario the market and economy will again find their legs. Mild speculations. Regards, Lee