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To: Barry Grossman who wrote (97810)	1/29/2000 2:33:00 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Barry, RE: "The pc that you buy today for $x is not the same as the pc you bought a year ago for $x." That is a good argument. To play devil advocate, I would respond that the demands on a PC are greater these days, because of bloated software and networking, so essentially you a buying the same thing, a currently functional device, at a higher price. RE: "I maintain that overall - THERE IS NO INFLATION." You could be right, I'm not so sure that it isn't just starting to creep into the pipeline. Several commodities have started to go up, not all come to mind, but I know copper and drywall are two examples. Gasoline effects almost everything, because almost everything is shipped. The trucking companies raised prices last year, and plan to this year. Airfares are up. Employment costs appear to be accelerating. The thing about inflation is that is slowly feeds on itself. You are right that companies have to continue to get more productive to offset higher cost, the big questions is how much more productive can they get before it eats into earnings (not allowed with today's market) or they raise prices. How much more productive can your company become? Can you overcome a 4-5% increase in labor and materials costs, and maintain the same gross margins, year after year? If Greenspan doesn't know the answer, I certainly don't. John