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Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: jwk who wrote (45)	1/10/2000 11:26:00 PM
From: PHILL	Read Replies (1) \| Respond to of 621

Don't you think that what is really powering the stock market is the personal retirement accounts which are pouring huge amounts of peoples monthly earnings into the market. With the tremendous upward drift this causes, it continues to attract revenues and money flow, carrying the market ever forward. Never in history have so many people invested as they are now thru 401s and Keoghs and such. Of course the bubble won't start bleeding until these accounts begin to pay out and that will take some time to really have any effect as more money comes in and the payout of this money will be gradual. The deflation issue is a hard one to get a handle on. As I understand it the growth of production reduces the price of products, the companies make more money by having reduced costs of producing a product. As competition sets in, companies compete by passing on the price savings to consumers. Eventually the price of the product becomes so cheap that the companies can no longer make a product and close down fabricating facilities, and laying off workers who then have no buying power which in turn causes depression as this happens over and over. PHILL