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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (37)6/15/1997 8:11:00 AM
From: Arthur Tang   of 435
 
The new economy and the need to balance productivity in all sectors.

There are 9600 industries in the United States of America. Each one industry plays an important part in the country. However, the dollar volume of some industries are exceedingly small. If a fad started, and all the money goes there, the economy would be unbalanced. Such as the dry cleaning business; when leisure wear came in, wool suits went out along with the dry cleaning business. Or was it the static electricity created by wool suits destroyed computers? In any event, all businesses protect themselves by evolving and re-inventing themselves to change direction and survive.

Now, the urge to invest and make more money fad came in. All the other businesses are making a lot of money as well, for now. The businesses did not foresee the shift of money to savings and investment; the economy could slow down. The business could only fight back by lowering prices and offer better products to regain their share of the economy. After all, the stocks are based on business profits. No business, no profit, no stock price increases is possible.

Is this healthy for the economy? All businesses will be forced to look for more efficiencies and productivity. Lowering prices to attract customers and built markets. Those who do not adjust quickly will go out of business. Wall street better start the wake up calls soon.

Deflationary economy will be sustainable. Building automated production and assembly equipment and laying out workflow efficiently will enable more products and services to be sold, more jobs will be created. Some money going to investment has to be put to work in new automated equipment not papers. And then we will be back on track to build a bigger and better new economy.
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