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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (28881)6/9/1998 8:47:00 AM
From: geewiz  Read Replies (1) of 132070
 
Hi MIke,

Somewhere in the past week someone posted thoughts on the asset inflation which may be starting to spill over into the real estate markets; have there been other periods of divergence between the commodities and equities? My economic history is sketchy; how were these other divergences resolved?

I suspect that the increase in liquidity is an intentional effort to stem the deflationary forces of the world. I have been expecting it to result in some evidence of inflation. The irony is that the inflation is restricted to equities, which would normally loose value if inflation showed up elcewhere in the economy.

Can we stem deflationary forces? OPEC can't enforce quotas on member nations and I noticed the price of oil was down another half dollar yesterday. The Asians keep talking about cutting chip production, but they keep exporting more; after all they've got bills to pay. I know from watching the phosphate exports just how quickly a necessary commodity can be cut to zero if there's no money.

I'd appreciate anyones' thoughts on this

best, art
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