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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: quasar_1 who wrote (68)10/23/2000 4:20:26 PM
From: excardog  Read Replies (2) of 74559
 
quasar you state:

<The only fly in the ointment has been rising oil prices. But this is a temporary phenomenon, the last gasp of the industrial age. Oil prices are not as intrinsically tied to corporate costs as they were during the shocks of the 70’s so this becomes much less of a sticking point.>

You are not alone with your belief's as I have heard this stated by the spin doctors on CNBC as well. I tend to disagree ,so many sectors of our economy are still tied to the price of oil and not just transportation. Procter and Gamble reported lower guidence due to rising oil prices all those soaps and plastic bags we use each day are affected. Textiles manufacturing uses oil and on and on. As long as the manufactures absorb these costs you are right it won't have any effect but how long do you think shareholders are going to buy that?

PG announced across the board price increases of 5% to 10% that went into effect this month. Inflation is on it's way, and not just from oil look at all those labor strikes we've been hearing about. The increased labor costs are bound to be passed along it's just a matter to time.

Although I'd like to believe in your deflation scenario the reality in my opinion is just the opposite. When and if Mr. Market takes notice and the US Dollar as you say starts to roll over that's the time one might pick up their chips and walk away from the table. Either that or one may not have any chips left should they stay too long. JMHO

Regards

ps: nice post
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