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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (33)5/25/1997 10:47:00 AM
From: Arthur Tang   of 435
 
How the USA new economy works?

The goverment spending is shrinking. Where is the pump that stimulate the economy? Do you believe CPI index adjustment? this year it is 2.9%; and it effects all of us one way or another. This is on the supply side.

On the demand side Wall street is pumping the economy by asking companies to improve by 15-17% in earnings. If companies can not get the improvements by efficiency so spending is less; they have to increase demand by offering more and better products and services. the results are more and better paid jobs.

This year we are looking for $8 trillion of GDP (Gross Domestic products). And will $10 trillion economy be far behind? No. Because the demand side pumping can be planned accurately, if FEDs provide liquidity and hold interest rate constant. Automation in production and services can compete with cheap labor and will eliminate low wages. With cost down, the world market can be satisfied by American production might. We will build capacity to keep up with the economy.
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