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Strategies & Market Trends : New US Economy Policy -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (219)	4/10/2000 11:41:00 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 435

The new economy and the efficient market? The efficient market is the economical model for many economists to define a free market. Is it true or does it have any significance in today's new economy. The answer is very short. The new economy is a planned economy. The efficient market is a model of chaos. People react to changes in supply and demand. Not taking into consideration of substitutions possible in supply and demand and cultural changes effecting supply and demand. If monetary policies were setup based on efficient market then serious mistakes will be made projecting inflation and cost of living. Where as, if the production, yields, and quality control were planned then supply should exceed demand by 5%. The excess availability then would be exported for profit. This is the no waste theory of the new economy. The excess 5% export will be appreciated, because of the variety it provides the rest of the world. The new economy is successful because of the planning and the execution based on the status quo of productivity, then 5% excess planning is introduced without much fanfare and efforts. Production capacity can often be stretched by second and third shift workers to 100% and 200% excess output. So far so good, no sweat; and no sweat is expected any time soon.