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Non-Tech : Invest / LTD

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To: RGinPG who wrote (4369)	10/17/1998 3:59:00 PM
From: Lucretius	Read Replies (4) of 14427

<<<Better stick to that because your explanation of the economics is a little simplistic>> simple enough to get me out of drillers and position CORRECTLY for the bear mkt. (G) sometimes simplicity is the best policy. You fail to take into account the fact that making money available at lower interest rates when NOBODY wants it will not change anything. When the US economy was closed off, recessions were caused by inflation as the strain on labor and resources grew every time the economy picked up (thus interest rates rose) and the Fed had to step in and raise rates to slow things down.. later they would ease rates because people were still eager to borrow and thus stimulate the economy, that is not the case in today's global economy. Money supply has been increasing at an exponential rate as the entire world has been scrambling for dollars.. what do you think happens when all those dollars come home to a country that has a record trade deficit, no foreign currency reserves to defend the Dollar w/ and a slowing economy? That's right... the dollar gets trashed and Americans see inflation.... what do you get.... STAGFLATION. enjoy the coming party (drillers will do better later, but they will see lower prices first IMO) -Luc

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