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Politics : Ask Michael Burke
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To: Earlie who wrote (48873)2/25/1999 2:11:00 PM
From: BGR  Read Replies (2) of 132070
 
Earlie,

If the deflationary wave could have somehow been arrested at an earlier point, perhaps we might have been able to avoid its impact. Now, it appears to me to be too late.

Three points:

1. Technology and deflationary pressures have always gone hand in hand. Successful companies are the ones that survived the deflationary pressure by building better technology. IMHO there is hardly a reason to conclude that there is a need to focus on arresting deflationary pressures on the present technology, instead companies which will always focus on building the future technology (providing higher margins for a while, but not for ever) will be winners in the long run. It is a dynamic and not a static world.

IOW, focus on the future and not the present.

2. And it is this deflationary pressure that perhaps keeps the inflation in the broader economy in check. And, despite the deflation, technology is continually accounting for larger sections of the total economy. So may be the 'New Era' folks do have some point after all.

3. Finally, reading your post it seems to me that it is a slowdown in demand and not competition that is INTC's cause for trouble. Even assuming that INTC has a monopoly by your calculation INTC is overproducing by about 33% (120 MM vs. 90 MM). The INTC projection model has to be completely off base for them to let this happen. While I appreciate your reluctance to present your analyses of how you reached the 90 MM figure, I remain skeptical.

-BGR.
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