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Pastimes : Ask Mohan about the Market

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To: Rational who wrote (9428)11/25/1997 10:58:00 PM
From: Cynic 2005  Read Replies (2) of 18056
 
As soon as deflation is fully expected, the rate of interest would automatically fall and the US stock markets would immediately climb up, IF (either the CB's did not exist) or CB's moved rationally.

Sankar, you are missing one crucial element for the stocks to climb-up. Corporate profits. Under a deflationary scenario, corporate profitability will be threatened and a rally in stocks is unlikely. IMHO!
-Mohan
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