Inflation in Asia

"Vietnam's accelerating inflation is threatening to morph into a full-blown crisis, and it provides a warning to other Asian countries trying to tamp soaring prices. ... When oil and food prices began to rise late last year, the State Bank of Vietnam, hoping to sustain growth, was slow to rein in inflationary pressure by raising rates or clamping down effectively on iresponsbile lending. ... But Vietnam presents a worst-case scenario of what could happen if the region's central banks don't act swiftly to curb rising prices at a time when their economies--unlike those of the U.S. and Western Europe--are still showing robust growth. ... The stock market's down 55% this year, and the prices of goods are rising sharply. ... The country's policy response to rising inflation 'has been both too slow and too small,' [Fitch Ratings] said. ... Vietnam's experience shows that danger of waiting too long before taking decisive action to head off inflation. ... A year ago, Vietnam was the darling of global investors. ... The country's biggest state-run enterprises began diversifying. ... A former prime minister, Vo Van Kiet, wrote a public letter to Mr. Dung last year saying these were precisely the mistakes South Korea, Malaysia and others made in the run-up to the Asian financial crisis of the 1990s. ... The Vietnamese, meanwhile, have been draining bank accounts and buying gold instead. Some have also started hoarding dollars as a hedge agianst inflation", WSJ, 30 May 2008.

"A proliferation of labor strikes in Vietnam is dragging foreign manufacturers into the country's worsening inflation crisis, while Hanoi's Communist leaders struggle to keep rising prices under control. ... Matsushita Electric Industrial Co. of Japan ... workers at one of the company's Hanoi plants ... are seeking a 25% pay increase. ... The strikes reflect the anger of tens of thousands of Vietnamese who have left rural farming communities to seek work in the new industrial zones around Hanoi and Ho Chi Minh City, only to see the buying powers of their wage packets dwindle amid rising food and fuel costs. According to government statistics, about 300 strikes took place in the first quarter, up from 103 strikes recorded in the first quarter of last year. ... The central bank has also increased interest rates--although at 12%, the main policy rate still lags far behind rises in consumer prices", WSJ, 3 June 2008.

Helicopter Ben (HB), note Vietnam's experience and learn from it. Poor Vietnamese, buying dollars, instead of gold. They'll learn.

Strike in a Communist country? Is that treason? Now, with the advent of HB's "import", inflation, the Vietnamese have a real reason to be angry with us.