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Technology Stocks : Dell Technologies Inc.
DELL 125.96-1.0%3:59 PM EST
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To: Frank Ellis Morris who wrote (137801)7/27/1999 9:30:00 AM
From: Ian@SI  Read Replies (1) of 176387
 
Alan G. seems to be quite worried that the wealth effect will directly lead to inflation as the newly rich stock market speculators spend so much of their new found wealth that the tight labour markets break with wages spiralling upwards bringing on a new round of inflation.

Thus his deliberate attempt at jawboning.

What seems to be happening rather than wage increases is:

1. Increased trade brought on by freer and fairer global trade practices.

2. Increased substitution of capital for labour thus contributing to Corporate productivity growth.

Rather than the labour shortage leading to inflation, I see it as leading to increased productivity. There are alternatives to labour now.

Rather than the wealth affect leading to wage inflation, it seems to be driving this increased productivity from capital equipment substituting for labour.

JMHO,
Ian.
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