New US Economy Policy Message Board

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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (79)	11/17/1997 8:17:00 AM
From: Arthur Tang	Read Replies (1) of 435

Inflation, deflation and liquidity in the new economy? Recently, paintings were auctioned off for a total of $240 million. Plenty of liquidity from the people assembled at the auction. Took a while to gether such wealth for the auction. If ill-prepared, and only $10 million were assembled. The paintings would be sold for $10 million. Inflation without liquidity, has to be balanced by many bankruptcies. Inflation with liquidity will soon deplete liquidity and the prices will fall back even more. The classical boom and bust cycle as such will begin repeating itself. Deflation without liquidity, will be balanced with more volume production. That is how this new economy was engineered in May, 1992. Food prices came down in 1993, so clothing business got better. Mortgage refinanced so the month payments are more manageable in 1994; and automobile sales had been good for a few years. If deflation coupled with adsquate liquidity is provided, our standard of living goes up. Ideal situation for this new economy. Therefore, deflation is here to stay. Automobile and new houses will all come down in price; and our standard of living will be better and cheaper. This is the new economy; it is planned.

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