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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (71812)12/13/1999 9:15:00 AM
From: valueminded  Read Replies (4) of 132070
 
Mike/william/Earlie:

Couple of thoughts/observations.
Timing:
I find it difficult to believe that anything other than a huge rally will occur between now and say mid January. I stand by my expectation that January will see a huge sigh of relief and the last large holdout of cash enter the market.
At the same time, I find it difficult to get excited about bonds. I still believe that bond yields will be in excess of 8% at the end of next year. The fact that we may be in a recession will be of no consequence. The FED has allowed it to get out of control and with the last months increase in money supply (last article I read was that it was the biggest in history) we are in for severe stagflation. Seems akin to the 70's moreso than the 20's to me.

Finally, my thoughts on the "deflationary impact of the internet" . Mostly a joke <imo> Yes, I know everyone buys on the internet. Why - well because its cheaper. The question that needs to be asked is: is it cheaper because it is a waaaay more efficient business model or is it cheaper because it has access to huge amounts of zero cost money & an artificial tax incentive (no sales tax). Both of these will disappear, and when they do, look for consumer goods to rise in cost recession not withstanding. No way businesses continually sell below cost and stay in business for too long.
The questions that need to be asked of our monetary engineers AG & Company is are we seeing efficient monetary allocation to any and all businesses internet related & do their businsess models support these allocations. (answers in the year 2000 imo)

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