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To: Paul K who wrote (84402)	2/8/2000 8:18:00 AM
From: Cynic 2005	Read Replies (1) \| Respond to of 86076

CPI is a mythical number, inflation is not! <<We have quite as interesting sitution. The CPI is a weighted index, but quite unlike, say the nasdaq where stocks with rising prices slowly begin to dominate the index due to their higher market cap. The way in which the CPI is constructed goods with rising prices have their weight reduced, while those with falling prices have their weight increased. To illustrate how this might work, consider a simplified CPI that consists a technology component and an energy component with equal bias. In time period one, a computer costs $1000, while a gallon of fuel coats $1. The "basket" of goods consists of 1000 gallons of fuel and 1 computer. In time period two, the computer now costs $500, while a gallon of fuel costs $2. The "Basket" of goods is now readjusted to 500 gallons of fuel and 2 computers. You get the picture? But it still only takes 1 computer to do your job, and you still need the same amount of fuel to commute to work and back. Food prices are rising, fuel prices are rising, technology is getting cheaper, so the CPI methodolgy assumes that you will eat less, travel less, and spend much more time surfing free internet sites like this. >> prudentbear.com

To: Paul K who wrote (84402)	2/8/2000 11:31:00 AM
From: pater tenebrarum	Respond to of 86076

contrary to what the scholars say here, i believe it's the U.S.'s private sector debt and current account deficit that will do the wrecking....much more dangerous than Japan's government debt imo.

To: Paul K who wrote (84402)	2/9/2000 1:36:00 AM
From: Skeeter Bug	Respond to of 86076

paul, japan was an economic wonder in the 80s and now they are the world's largest debtor nation? wow! things change quickly, don't they?

To: Paul K who wrote (84402)	2/9/2000 3:24:00 PM
From: Earlie	Read Replies (1) \| Respond to of 86076

Paul: I posted a note on Dec 14 in which I noted four possible "triggers" that could end this bubble before April. One of them was the Japanese situation. Sounds like I am not the only one who sees their economic implosion/exploding public debt as a problem, although at the time, it was a "lonely" point of view. (g) Best, Earlie PS. Most investors have conveniently forgotten that Japan has been the world's "banker" for the last decade or so. That banker has fallen on his sword. There is no visible replacement. What Greenspan is doing is a far cry from being a banker.