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Strategies & Market Trends : New US Economy Policy
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To: Arthur Tang who wrote (55)9/3/1997 7:40:00 PM
From: Arthur Tang   of 435
 
The new economy and the balance between demand and supply side.

The demand side of the new economy is the demand of products and services( limited by the wages, investment gains and credit) + Mass distribution inventory (limited by shelf space available in stores).

Inventory in a country such as America is twice the demand per year in order to provide availability when people want to buy them. The demand side of the economy is improved by planned obsolescense and replacement. This is now done by computer design software which can create a new product design in a matter of weeks.

The supply side of the economy is the production capacity (limited by equipment and manpower)+ Services (limited by population)

Most people think of supply side in term of government spending. They are wrong and therefore can not get the old economy going for more than a year. To defy the population and equipment shortages; the automatic production and assembly lines have to be designed to save labor. To do the new equipment, we still need comprehensive design software which includes mechanical design software and automatic control tools and electrical and electronics software combined in one. Thus, supply side of the economy can balance out the excess demand. Inflation or cost increases from lack of supply to meet demand will not ever exist.

This is the equation of the supply and demand, our new economy.
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