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Strategies & Market Trends : New US Economy Policy

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To: Arthur Tang who wrote (9)2/20/1997 4:49:00 PM
From: Arthur Tang   of 435
 
The new economy and business cycle

The US business cycle somehow is related to the presidential elections. In general, the Demoncrats have 1/2 year of immediate good economy; then 3 1/2 years of bad economy. The Republicans would use supply side economy to boost economy for 1- 1 1/2 years at the end of their presidential term. Republicans therefore got more terms than Democrats.

Currently we have 5 years of continuous growth, done on the demand side economy. First, Wall street rebuilds overall capital of stockholders by re-evaluate the stock value fairly. Then the supermarket system was rebuilt by promotional sales each week. Now, department stores and auto dealers all goto promotional sales. Service industries also promote their business. When business slows, accelerated schedules goes into effect. Meaning more goods and services are produced to provide better choices for consumers. Obsolescence turned the apparal business around by redesigning the clothing to classic design, with designated colors each season since 1995.

All in all, the economy is controlled to increase 10% each year by design; but only achieve 3.5% in real GDP. The inefficiency or rather over design of growth, leaves some room for error. So far so good.
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