Wednesday, January 6, 2010

Rising Metals prices may make cars, durables, houses more expensive

Either the durables become more expensive, or the manufacturers watch their margins erode. Since margins are already thin, prices would have to rise. By the way, monetary inflation or devaluation, not rising metal prices, make durable goods more expensive.

Some economists expect rollback of easy monetary policies and stimulus this year as policymakers may stare at demand-led inflation.

Wishful thinking to say the least. Credit continues to contract as creditworthiness erodes and lenders hoard cash. Inflation going forward will be currency- rather than demand-driven.

Source: economictimes.indiatimes.com

0 comments:

Post a Comment