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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (46144)	6/24/1999 9:21:00 AM
From: j g cordes	Read Replies (1) \| Respond to of 120523

The nasty cycle.. If consumers feel rates/prices are going up they will buy more now. The perception of rate hikes initially increases spending... through every sucessive rate increase until the cost of business itself becomes too high, then activity implodes. Fed watchers will point to increased spending as a sign of an overheated economy, when in fact they are often the cause. It would be interesting to see what would happen if the Fed voted to lean towards easing! Demand would back off because the perception of buying now, before prices increase, would subside. With demand off, productivity, competition and greater efficiencies exercise the best management of inflation. Jim