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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC) -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (341)	9/5/1999 11:58:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 587

A company must increase the price to cover costs, but they can't because the competition won't let them. Therefore, a rise in hourly earnings won't cause inflation, rather it will squeeze margins. That isn't enough to cause inflation per se. Other factors must be in place. This is a common error of the demand management school which believes that beyond a certain rate of output an economy starts inflating. The '90s have seen strong gains in output without inflation much to the surprise of the FED since they are dominated by demand management thinking. Inflation starts up and then you see the strong increments to hourly earnings. The difference is that there are various constraints on increasing output commensurate to demand for increased compensation and there is artificial stimulation of demand. Recently one of the regional Fed presidents, Mcteer, said that the best indication of future inflation is current inflation. That view is so addled that it indicates the FED is flying by the seat of your pants. It's backward looking in order to set policy for the future which is similar to making inferences based on hourly earnings.