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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Techplayer who wrote (13082)	8/29/1999 3:53:00 PM
From: Thomas Scharf	Read Replies (1) \| Respond to of 18016

Talk about political suicide, Greenspan's recent remarks indicating that central bankers should start trying to manage the prices of stocks and other financial assets must scare the hell out of Wall Street. That's a concept as radical as anything Marx & Engels ever proposed. If he keeps on this track, conservatives will be (justifiably) howling for his head on a platter. Early this year, Greenspan made some comments that he "may have underestimated the effects technology has had on productivity", but he really hasn't a clue as to how powerfully the data processing & communications revolution has changed the business cycle for the industrialized world. At its most fundamental level, inflation is caused by an imbalance between demand and availability of an item. Historically, it took months or years just to recognize such an imbalance in one part of the world much less for the rest of the world to respond by cranking up production of whatever product was in short supply. Today, computers make it possible to recognize or even forecast developing imbalances almost instantly and with rapid communications, someone in another part of the world sees the imbalance as a business opportunity and responds so quickly that price inflation is softened. In the end, I don't believe that anything Greenspan does or says has much real effect (except for short-term psychology) on the US economy. I subscribe to Harry S. Dent's ("The Great Boom Ahead", "The Roaring 2000's") ideas that the economy is being inexorably driven by demographic trends. We should have another 7-10 years of high growth ahead of us before the bubble bursts. Make hay while the sun shines <G>.