Expect more expensive tires next year

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Monday, November 19, 2007
By Yokota Fritz

Bicycle Retail and Industry News reports we can expect more expensive tires from Kenda, WTB and other tire vendors next year as sky high oil prices add to the manufacturing and shipping costs of these items. I suspect also that the crash in value of the U.S. dollar against the Chinese Yuan (and every other major currency) will lead to increased prices of everything made in China, Europe, Malaysia, Indonesia, Canada and other manufacturing nations.

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Good thing we don't get a lot of our products from China...

Oh wait.
The Chinese Yuan doesn't float in value in the currency markets, but is actually coupled to the US dollar, as mandated by the Chinese government. The coupling used to be a rigid 8:1 (Yuan:Dollar), but a year or two ago China allowed the Yuan to be coupled to a "basket" of international currencies that was strongly weighted toward the value of the dollar. Today a dollar will buy 7.42 Yuan, but most economists believe the Yuan would have much greater buying power if China allowed it to be traded freely. (by keeping the Yuan artificially weak, China assures strong markets for its goods abroad)
Interesting; Thanks for that info, Anon.
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