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 (5)	1/25/1997 6:51:00 AM
From: Arthur Tang	of 435

This new economical policy started by the need of capital for the US economy. US citizens have not been able to save their money for investment. So, a concept to rebuild America's capital was conceived in 1991. It was believed then that the 9600 industries were under evaluated on Wall street. Therefore stockolders did not have the benefit of wealth from stockholdings to invest in US companies. The technological advances were creating sudden death of many companies not being able to notice the changes and adapt to new technologies quickly. Several steps were taken to rebuild capital in America. First, banks and companies were encouraged to merge and aquire other banks and companies. consolidation changes the evaluation of stock values. Then companies of doubtful future were redirected to technologies they can adapt for a brighter future. It is still a very slow process. Analysts on Wall street were charged with the responsibility to push industries for better earnings. Distribution system (supermarkets, store, and autodealers) were directed to do promotional marketing (reduces inflation)and increase capacity to provide manufacturing firm a place to display and sell their wares. Now, with superior design software US firms can have faster product cycle, better quality control, and efficiency from computer system management. All this is based on demand side economy, obsolescense and replacement of population needs. As long as population grows, the economy will be better each year. The supply side economy of the past is now held steady. This prevents boom and bust business cycles. Because of automation in all phases of the economy, energy and labor cost are insignificant in the unit cost of the products we buy. Cheap labor can not compete with automation in cost and quality. Inflation has been controlled by over supply of 10% increase of productivity planning. So far so good.

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