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Earl -
Good post. I still see room for another smaller leg down in US bonds.
Not the end of the world, mind you, but preferably to the 6.30/6.40%
range. What folks forget about too, is that though core is important,
COLA adjustments are based on total CPI inflation, so if oil keeps going
up, there will be wage pressures from that front. That does not increase
real wages, but it does increase costs to companies and the government
for social security, etc.
---
Steven W. Poser, President
Poser Global Market Strategies Inc.
url: http://www.poserglobal.com
email: swp@xxxxxxxxxxxxxxx
Tel: 201-995-0845
Fax: 201-995-0846
----- Original Message -----
From: Earl Adamy <eadamy@xxxxxxxxxx>
To: List-RealTraders <realtraders@xxxxxxxxxxxx>
Sent: Friday, September 10, 1999 11:26 AM
Subject: Bond rally vs inflation
> It never fails to amaze me how the "volatile food and energy" sectors
are
> ignored when the PPI and CPI are released. Certainly bonds are a bit
> oversold, however there is no credible bottom in place. Anyone who
follows
> the copper and oils markets is not going to go wildly bullish on
bonds.
>
> And commodities do not begin to speak to labor costs. I live in a
small
> (5000), remote, seasonal, mountain community. Most of the working
population
> has been willing to accept sub-par wages for menial jobs for the
opportunity
> to live here. The strong economy has propelled a second home
construction
> boom accompanied by a number of relatively large commercial lodging
> projects. Now the labor market has gotten so tight that our tiny paper
is
> filled with large ads touting high wages and signing bonuses.
Community
> leaders are talking about building tax-payer subsidized low cost
housing to
> attract workers. Our club is going to have to raise wages by at least
20% to
> halt staff turnover which has become epidemic from top to bottom. With
this
> being a spill-over economy, I can only imagine what the labor market
is like
> in larger communities and cities.
>
> Earl
>
>
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