Completely OT: Inflation

Tue Oct 4 10:16:02 PDT 2005

John,

Quite an extensive review of the current state of things.

Some things everyone should consider before you get too scared.

1. The federal reserve , which is essentially controlled by Greenspan, seems 
to be committed to maintaining its current creation of money. In other 
words, they have been creating a sufficient amount of money to keep money 
flowing. I don't see signs of that slowing down.

2. China: China is in trouble. They have problems with their workers who are 
now asking for many more benefits (much more costlier) than they have ever 
envisioned. The cost of labor in China will definitely rise. The banks that 
have been making loans to business have a tremendous amount in defaults and 
have written off many more loans. The banks will be tightening their belts 
shortly. Manufacturing will be coming back to the US. It has already 
started.

Stay the course. The USA will be fine unless things change drastically.

Dennis Malen
----- Original Message ----- 
From: "John Esak" <john at valar.com>
To: "Fplist (E-mail)" <filepro-list at seaslug.org>
Sent: Tuesday, October 04, 2005 12:42 AM
Subject: OT: Completely OT: Inflation

>
> Why is this hard for people (even smart people) to understand?
>
> We are closing our fiscal year. Just did the closing inventory, all the
> accounting is buttoning up and so forth. With all the news and cost
> increases due to oil and natural disasters like Katrina hitting us (and
> everyone so hard), we are planning for the upcoming year. Want to hear 
> some
> doom and gloom?  Here goes.
>
> We will be cutting back on everything, trying to economize everywhere and
> keep costs down. We just sent out an increase letter announcing that most 
> of
> our basic prices are going up by 24 cents a pound!  Believe me that is a
> HUGE number, GIGANTIC. Increases are usually is pennies, if that, and 
> often
> they may even be decreases, that is sometimes they actually go down based 
> on
> industry-wide resin prices. Every plastic company is in the same boat as 
> us,
> and must do essentially the same as us, responding to varying costs almost
> minute by minute. You can bet every company our size just sent out the 
> very
> same increase letter to their customers.
>
> My question is this. How is it that people (economists, pundits, everyone
> seemingly - except me) feels that there won't be immediate HUGE inflation
> everywhere. With gas at the pumps moving in the $3/$4 dollar range and
> companies like us having to raise manufactured goods costs (petroleum and
> natural gas based as plastic resin is) up by so much to stay in 
> business...
> How in the world will other companies who buy this stuff from us survive
> without raising their prices as well? Do you see where this is going?
> Doesn't everyone SEE it?  What is wrong with this picture. To hear the 
> stock
> market analysts on all four networks (and the cable channels) saying over
> and over again "rising oil prices will not hurt the stock market"... I 
> stay
> in a state of appalled disbelief. It's like these guys (and gals) have
> absolutely zero connection with the real world. Exactly where do they 
> live?
> On what planet? Are they fooling their network owners, too? Is that what 
> the
> media moguls *want* to hear? Is that why we are hearing it?
>
> Based on what is happening to us, I would suggest that everyone hold on
> tight. The bottom is about to fall out after all. It's going to be a rough
> ride, and who knows what will shake out and who will be around after it 
> all
> comes crashing down.
>
> Ballooned prices and unrealistic valuations can exist in the real estate
> market and have for decades... but that is only because there is only one
> source of "supply". The house or building is where it is, and you want it 
> or
> not based on that, period. With goods (such as we all manufacture here in
> America at unbelievably inflated costs) the paradigm of supply and demand
> breaks down. The same goods can be made with virtually zero (or at least 
> 10
> cent an hour labor) costs in China. So different is their economy that 
> even
> *with* the enormous increase in petroleum and natural gas raw materials
> (like resin), they can produce the same goods (though not usually to our
> high quality standards) and ship them over here to sell in our economy at
> prices lower than we can!  America's buying power is being forced to look 
> in
> that direction. If the short-sighted executives of our companies give in 
> and
> move exclusively to buying from that source, the infra-structure of our
> economy WILL die. It happened with steel and it will happen with 
> everything
> else, too. Unless we join our economy with the various other world-wide
> economies in such a way that makes sense, the entire house of cards will
> come down. If something doesn't bring down the cost of oil, and if the
> economists of the world don't make it a level playing field for all... 
> very
> soon, there is not going to be much left to do other than watch the world
> sink into utter devastation.
>
> In regards to oil, all we can hope is that George Bush's historic move 
> into
> the Middle East to bring the sanity of civilization and human rights to 
> the
> only region of the world that hasn't been able to develop these ideas on
> their own for thousands of years, will eventually, sooner than later, put
> the natural resources of that area under a system and society that will
> steward them for the entire planet as a sacred trust. This, rather than 
> the
> chaos that now exists there at the major wellheads of the world... which
> does nothing but pour money into the pockets of a few rich families and
> individuals. At some point in future history, we will look back on these
> times as barbaric and savage.
>
> As regards to the economies of all nations, a little more engineering and
> development of ideas at these worldwide summits rather than recriminations
> and fighting... not too mention fewer or no bombings, might do the trick.
> The thing about money and its transfer is that it CAN be worked out 
> amicably
> and equitably... always has been this way... always will be this way. When
> there is a win win attitudes, things work and stay working. Unfairness
> fosters discontent and problems.
>
> There is not much time left. We all better get a plan... a world-wide
> plan... based on developing a new source of energy... not just for
> ourselves, but for everyone. The tenet and overall view for this work must
> be dedicated toward the belief that our Spaceship Earth is the closed 
> system
> that it is. Otherwise, can anyone out there see things getting better?
>
> --
> John Esak
> The Valar Group
> (570) 384-2444
>
> Visit The FP Room www.tinyurl.com/97y9u 24/7
>
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