The only reason they moved to the front of the pack is that they took so long to curtail production. I'm not sure that this really means anything in this economy.

Top producer to involvent in 18 months or less.

I heard the other day there are 3-million unoccupied homes in the US. That these homes will have to find occupants before sustained growth in the housing industry can begin again.

I think the hyper inflation we will see in the coming months will devastate the Canadian industry unless we can find a way to start moving the pricing at a pace with inflation.

Already the massive debts Obama wants to incur to stimulus spend (redistribute) the economy out of recession are running into predicted troubles. We already have an historic bubble in the treasuries because everyone made flight to bonds for security in light of the bankster corruption of the deregulated capitalist markets. Most all of this money is parked short term because no one wants to be caught there locked in when inflation takes off... this is setting the stage for a nasty feed back loop once inflation rises, because no one wants to have money in an investment that returns less then the rate of inflation... so as they all move out of treasuries, then interest rates will have to go up to try and attract the funds Obama needs to fund the deficit spending stimulus... already we seen this week that investors aren't willing to buy more treasuries with the US Fed and the Bank of London failing to find buyers in their latest offerings... that IMO was a huge turning point... the golden age of a stable currency and low interest rates is soon to be over IMO and we will soon experience the cost of current policy... retired folks or anybody with saving will be hurt the most.

So inflation and potentially hyper inflation is already in the cards for our near future as policy is now to monetarize debts made in the casino economy of Wall Street and Congress in the US. Conservative investors that played by the rules are being made to pay the cost for bankster policy and bailouts). How will we deal with the inevitable consequence of a rising Canadian dollar when we are selling into an economy that is seeing its purchasing power evaporate? Furthermore within the industry itself one has to realize that when you reduce production you increase the shared overhead costs (contribution margin) needed to cover the expense of a lower production level and thus increase the break even point required per unit of production... and thus an internal driver of inflation and the requirement to demand a higher price for the end product.

This contribution margin effect is going to run wild throughout all industry that has made cut backs in production to deal with declining demand, and not just be limited to the lumber industry, and thus inflation drivers will come from all industry under the same pressures to maintain profitability with a lower production level and the same overhead costs as before.

The only answer to deal with the coming hyper inflation IMO is for the largest of the forest companies to form an OPEC like marketing body that sets a minimum (rising) price for lumber all members abid by until inflation drops back below a certain level... otherwise all will go down with the sinking ship. Like the gold standard we need some sort of lumber standard to the value of our currency of trade or we will sink from the inflation alone to say nothing of demand.

Time Will Tell

Kitkat....for what it is worth -

in 2008 W Fraser reduced production by 4%

in the same period Tolko increased their production by 8%