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Strategies & Market Trends : Steve's Channelling Thread

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To: pressboxjr who wrote (17562)6/11/2001 8:46:39 PM
From: Zeev Hed  Read Replies (4) of 30051
 
When we had the explosion in money supply in 1971, inflation did not kick in until late 1972 and then was aggravated with the oil crisis. It takes time for excess money to put pressure on goods, particularly when those goods are in abundant supply (over capacity). Still, the recent inflation rate at 3.3% is twice what it was at the through few years back. Part of my mid 2002 (or later) bear market is assuming that the fed will have to start and tighten to reign in inflation, but they will have to do it not when the GDP is growing at 4% plus, but an anemic 2.5% to 3%, bringing on a real recession which will find not just corporations tightening, as is the case now, but the consumer batting down the hatches.
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