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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: BigBull who wrote (71444)2/24/2001 3:04:54 PM
From: Joan Osland Graffius  Read Replies (3) of 436258
 
Big Bull, >>I think what you seem to be arguing is that the business cycle has been repealed and deflation can't happen because of the food business? Ok, call me from another planet, but there is now no pricing power in huge sectors of our economy - cars and computers. So what the food industry giveth the manufacturing industry taketh away.

No, I am in full agreement with you on the business cycle. Sorry for my confusing response. I also agree that there is no pricing power in "huge" sectors of the economy. What I was trying to say was that, companies where there is no pricing power will not sell their products for very long below cost and their products just plain and simple will not be available in the market place.

What I am trying to figure out is; if it is possible for deflation to rear its ugly head. I believe OPEC has learned its lesson and will not let oil prices sink to $10 a barrel again and they will keep the price just where they want it, which means that our cost of energy is not going much lower. Natural gas is going to be a problem for a few years and should not deflate for a while. Labor should become cheaper as people are put out of jobs, but they will need to figure out how to pay the bills, and as you have pointed out the debt burden is going to get even with a whole bunch of folks before this is all over.

Joan
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