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Strategies & Market Trends : Asia Forum

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To: MikeM54321 who wrote (4352)6/10/1998 5:45:00 PM
From: Bill Ounce  Read Replies (1) of 9980
 
re: rising inventories (what did Greenspan say?)

There are a few ways to get rid of rising inventories:

(1) hope for the best -- the economy will speed up and take care of it.

(2) discount to get rid of it -- This is what computer hardware vendors have been doing lately to maintain market share.

(3) idle production -- this is what happens when the economy slows down. Lots of companies simultaneously doing this results in recession.

I personally belive the most efficient way to "abruptly slow" an "unsustainable rise in inventories" is to idle production. This makes me think that a FED rate increase is unlikely because one of the first signs of a cooling economy is a rise in inventories.
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