A friend of mine that runs a fairly high profile consumer goods company. Here is what he wrote about being on the front lines of currency devaluation, inflation, and the “R word”:
Well here is the news from the front lines regarding inflation at the micro level:
- We have increased some prices, and now when setting prices are setting them higher than usual in anticipation of marginal pressure from retailers and a global slowdown. We are also trying to decrease inventories, slowing down our purchasing.
- We are extremely concerned about RMB appreciation, a driving force of the above.  This will cause tremendous, maybe unanticipated pressure on prices globally.
- Quotes from our Chinese suppliers are only guaranteed for the smallest of windows. 90 days sometimes, when it used to be a year.ÂÂ
There is a mini-panic in China right now in terms of the three-way, simultaneous impact of a US consumer spending slowdown, new expensive labor laws, and an appreciating RMB.ÂÂ
