VALENCE TECHNOLOGY (VLNC) Message Board

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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Gordon Quickstad who wrote (9980)	3/28/1999 6:32:00 PM
From: gvander	of 27311

Money need not go anywhere -- values, represented in this case by dollars, can actually vanish. For example, money multiplier can collapse. Collapses can occur in any area for a variety of reasons. Values collapsed in Japan, yet corresponding Yen did NOT "flow" anywhere else. This can happen in periods of unanticipated inflation or deflation. This can also happen when there is an unanticipated external shock which causes investors to reevaluate their investment horizons and/or risk preferences causing investments to be bid lower--this occurs not from selling (no trade actually occurs)instead the lower prices are caused by an unwillingness to buy for current prices. This causes prices to fall (traders drop prices to encourage transactions i.e. liquidity which is where their money is made) until a new equiallibrium is reached and trades begin again--but that value (represented by dollars) is gone forever WITHOUT flowing somewhere else. This can happen rather abruptly. BTW what happens when an economy or market runs low on buyers? I am pretty sure everyone who can has bought in over the last 5 years -- who is left to absorb selling let alone set a price for large blocks in need of a bid. Just my opinion.

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