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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: N who wrote (1325)2/25/1999 5:25:00 PM
From: Lee  Read Replies (1) of 3536
 
Nancy,

Upon further review, there is no question that prices are definitely trending up. The PPI, CPI, and GDP prices all are trending up. Is this a sign the threat of world deflation has passed?

Wages and salaries are trending up, benefits are trending up, and the employment cost index is up. Productivity is up too but capacity utilization is down.

The unemployment rate is steady to falling while labor force participation is up. New unemployment claims are low. The help wanted sections are nice and thick.

Where too from here? I think the answer is quite dependent upon the answer "Has the threat to world deflation passed?" The G7 have been calling for world reflation. Mr. Greenspan offered to help, but not at the expense of troubling inflation here at home. He took us to the brink and rising world prices could send us over the top.

Right now world growth seems to indicate that the inflation animal is not rising from the dead, even if the back of world deflation has been broken. Rates in Europe seem to call for lowering because of struggling demand. Here in the US a primary inflation concern remains labor cost. How long until they really begin to spike?

Wish that I had the answer.

Regards,
Lee
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