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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: A.L. Reagan who wrote (9374)	4/22/2000 5:56:00 PM
From: Ben Wa	Respond to of 24042

here's a wild card - if msft got broken up, that would radically change the naz100, an index so many talking headless heads yak about on tv. then what? it might screw up the pure technicians, which would be fun in itself!

To: A.L. Reagan who wrote (9374)	4/22/2000 8:09:00 PM
From: Whistler30	Read Replies (1) \| Respond to of 24042

Surge in Oil Prices is not Inflation; So Why Boost Interest Rates Now? By Paul Craig Roberts Investor's Business Daily Monday April 24th Inflation fears are mounting on Wall Street and in other parts of the country. Liberal economists, however, are breathing sighs of relief at the prospect of inflation again rearing its ugly head. They are desperate for inflation in the hopes it will restore their credibility. For two decades liberal economists have been gnashing their teeth. Such a long economic expansion without rising inflation was not supposed to happen. It was forbidden by their Phillips curve, a proposition that claimed low inflation had to be "paid for" with high unemployment. According to liberal economists, President Reagan's supply-side economic policy would cause record breaking inflation. Instead, we experienced record breaking economic expansion while inflation declined. Now the consumer price index is showing some signs of stirring. But is it inflation? Inflation is a monetary phenomenon. Its cause is too much money chasing too few goods. In olden days inflation was caused by rulers hungry for money to pay their bills. They would clip the coinage or debase the precious metal in order to increase the quantity of money. In the 20th century bloated governments could not borrow because their bonds were not to be trusted, so they printed money to pay their bills. These increases in the supply of money relative to the supplies of goods and services pushed up the prices. Even industrialized democracies with good credit ratings suffered inflation at the hands of their economic policy. Until Reagan and British Prime Minister Margaret Thatcher took control 20 years ago, "demand management" was the operative policy. In conflict with itself and common sense, demand management used monetary expansion to pump up consumer demand in order to maintain high employment. To keep inflation in check, the policy relied on high marginal tax rates to drain off increases in income that might otherwise result in an excess of consumer spending and higher prices. Demand management caused inflation. The high tax rates left scant rewards for suppliers to increase the output of goods and services to meet pumped-up demand.Thinking that taxes affected only consumer spending, policy makers in the U.S. and Europe overlooked the effect of high taxes on the supply of goods. The rewards for work, risk-taking and entrepreneurial effort dissipated. Unions engaged in restrictive work practices, and producers found it easier to let prices rise than to increase output. Prices, not productivity, rose with monetary expansion. What is happening today? To gain insight, consider that our inflation measures are not always a reliable guide. Prices can rise for non-monetary reasons even where money growth is low and there is no inflation. For example, the Arab oil cartel can reduce the supply of oil and drive up its price. A higher price of oil directly impacts the cost of transportation, energy and plastics and is felt throughout the economy. But this is not inflation. It is higher prices due to reduced supply of an important factor of production. Raising interest rates to cool the economy will not increase the supply of oil. Higher interest rates will make it harder for producers to lower costs elsewhere in order to offset higher oil costs. Economists and the Federal Reserve often confuse inflation with an increase in the price of a commodity. If oil sheiks decide to use their market power by reducing output, it makes no sense for the Federal Reserve to push up interest rates and wreck our economic expansion. The right response to the oil cartel is to use our diplomatic power (if the Clinton administration still has any) and to take actions to lower costs elsewhere while developing substitute energy sources. Lower taxes and stable financial markets (to facilitate the raising of new capital) are saner responses to monopolistic behavior by overseas oil producers than a hike in interest rates. A real inflation would not show up in the price of oil. The Federal Reserve should have definite evidence that it is creating new money at an excessive pace before raising interest rates.