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To: Peace who wrote (28874)	9/1/2000 10:52:50 AM
From: James Strauss	Respond to of 42787

Peace: We got the low NAPM number today... We should see some swings in the market today... But, look at those Nasdaq New Lows... finance.yahoo.com It continues to say that the selling has dried up... And, those New Highs continue in that +100 range at a 3:1 ratio to New Lows... The broader picture says that the primary trend is up regardless of the short term swings within the Atoms of The Mona Lisa... : > Jim

To: Peace who wrote (28874)	9/1/2000 8:08:59 PM
From: Perspective	Read Replies (2) \| Respond to of 42787

People are making the implicit assumption here that a slowing economy means dampening inflationary pressures. I would remind you that the Fed responds not to economic growth, but rather inflation. I DO NOT see inflationary pressures abating, I see them accelerating. Look around you. Look at wages, look at real estate, look at energy. I know everyone has been coached to throw them out, but when people make salary demands, they certainly roll them in. Just as we saw strong economic growth with little inflation, we can also have weakening economic growth with accelerating inflation. Just ask the Europeans. By the way, it has happened before; it's called "stagflation", and it made for a lousy decade the last time it rolled around. It's actually what happens if the economy runs undamped by the Fed. Much like the lag between the Fed's actions and the economic outcome, there is a lag between money creation and resultant inflation. By the time the inflation shows up, the money supply has been in the danger zone for months. BC