Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (3011)	4/14/2000 12:33:00 PM
From: Smiling Bob	Read Replies (2) \| Respond to of 19256

HKF 3 5/16 x 3 3/8 One stock immune from all the turmoil and likely to rise through good or bad markets Pays a nice dividend too ScottOnStocks.com

To: Smiling Bob who wrote (3011)	2/16/2001 3:11:27 PM
From: Smiling Bob	Respond to of 19256

Stagflation back in vogue Message 13424770

To: Smiling Bob who wrote (3011)	3/2/2003 1:50:36 PM
From: Smiling Bob	Read Replies (2) \| Respond to of 19256

Stagflation word still being kicked around Message 13424770 Experts Worry on Stagflation By RACHEL BECK 03/01/2003 15:49:10 EST No sooner did hints of rising inflation emerge then the muttering began on Wall Street about the possible return of dreaded stagflation. It was last seen three decades ago, when rising inflation, surging unemployment and failing growth crippled the U.S. economy. No one would welcome its return. It's not that the economy is faced with this grim scenario just yet. But a prolonged war, continued gains in oil prices or the economy's failure to recharge soon might make stagflation a possibility in the not-so-distant future. In periods of stagflation, economic growth remains very weak, but inflation roars ahead - as it normally would during times of rapid expansion. It's a term that was coined in the 1970s after the OPEC oil embargo caused a dramatic surge in the cost of crude oil and gasoline and sent inflation soaring. "High inflation pushed up interest rates and eroded buying power, and as a result consumer and business spending remained soft, preventing the economy from growing," said Sung Won Sohn, an economist at Wells Fargo & Co. in Minneapolis. "It was a vicious combination of factors." Every few years, fears of returning stagflation turn up. Most recently, there was some talk of it in the spring of 1994. This time around, a slight gain in inflationary pressures - after months of no inflation concerns at all - spurred some speculation about stagflation making a comeback. Much of that was fueled by the recent surge in oil prices, which have reached levels not seen since 1990 as the United States prepares for a potential war in Iraq at a time when crude supplies are extremely tight. There also have been price jumps in other commodities, including metals, cotton, aluminum and food products like wheat, corn and beef. All that led to the much bigger-than-expected 1.6 percent January gain in the Labor Department's producer-price index, which tracks wholesale costs. It was the biggest monthly increase in 13 years. Just the thought of increasing inflation added to lingering concerns over the sluggish economy. There has been very little in the way of job growth. There are still huge numbers of new jobless claims each week, while companies take little initiative to add to their work force. Corporate earnings remain depressed, despite improvements in productivity. Companies face higher material costs but lack any ability to raise prices. Manufacturing in many sectors has come to a halt. Then there are consumers, who appear to be losing confidence fast. Since they've been economy's backbone through the last few, tough years, there are concerns about what will happen if they scale back their spending. "The economy is still very weak and unemployment is not coming down," said Gary Thayer, chief economist at the St. Louis-based investment firm A.G. Edwards & Sons, Inc. "We don't want a flashback to the 1970s when people were seeing their job situation deteriorate while their earnings were getting squeezed." The key to avoiding stagflation will be a sharp reduction in oil prices and an immediate turnaround in the economy. There is some hope that a quick resolution in Iraq will be enough to do the trick, though some economists warn that might not solve everything. There are other factors propping up oil prices, including the impact of the Venezuelan oil strike, and the war isn't the only problem weighing on the economy. "Geopolitical uncertainties are certainly troubling right now," said Anthony Sabino, associate professor at St. John's University's Peter J. Tobin Business School. "But people are also worried about whether they will even have a job tomorrow." It's too soon to call stagflation a certain threat. But it waits in the wings. ___ Rachel Beck is the national business columnist for The Associated Press. Write to her at rbeck(at)ap.org siliconinvestor.com