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To: Zardoz who wrote (42479)	10/8/1999 12:03:00 PM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 116764

Hutch: Definition of inflation: -higher oil prices -higher health care prices -higher wages -higher commodity ( copper, alum ) prices -higher number of senior retirees requiring services. -higher cost of money ( interest rates ) because: All of above are higher costs to the government who will have to issue more IOUs/bonds to pay for it because people have voted down higher taxes to pay for that, so far. They will compete with private requests for IOUs ( bonds from private sector). i.e. cost of money and interest rates will be higher. So print more money or cut spending. I know of no Government so far that is ready to cut spending. So we are left with printing more money. Or as Santayanna would say, those that don't learn from history are bound to repeat it's mistakes, TA Message #42479 from Hutch at Oct 8 1999 11:49AM Wage pressures > Job growth. I see the Inflation Rate outstripping Economic Growth as we move into the First Quarter of 2000. And what exactly are you using to define inflation? Earlier this year, I suggest inflation was around 6.25%, now closing in on 4.5%. But that's because I follow the monetarist ideas of inflation. Tell me what you suspect inflation is, and what are your measures. Certainly the home prices are not running 1.5% are they? Best of regards Hutch

To: Zardoz who wrote (42479)	10/8/1999 12:21:00 PM
From: Rarebird	Read Replies (2) \| Respond to of 116764

My view of where we are headed: Hutch, as Money wages rise in the higher stages of production so does the demand for consumer goods. A counter force has now been set in motion whereby the lower stages of production start attracting factors and resources away from the higher stages. Eventually prices begin to rise, the current account deteriorates, interest rises, idle capacity and unemployment begin to emerge. Yet the government now has no choice but to apply the monetary breaks. Once this happens malinvestments in the form of increasing idle capacity and rising unemployment make their appearance as the recession goes into full swing. This is the genuine recovery phase. It is the phase that liquidates the unsound 'investments' and allows the capital structure to rid itself of distortions. So long as prices are allowed to adjust, full employment and output will be restored. The sharp and very deep American depression of 1920-21 provides an excellent example of this process at work. Bottom Line: The US ECONOMY is in big Trouble come the Year 2000