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To: marginmike who wrote (31151)	10/25/2000 12:37:35 PM
From: pater tenebrarum	Respond to of 436258

it's asset deflation, coupled with commodity inflation.

To: marginmike who wrote (31151)	10/25/2000 12:49:41 PM
From: Perspective	Respond to of 436258

<Is is deflation, inflation? Who the heck knows! > Yes, both. And that's what's so hard for people to understand. You have inflation in commodities accompanied by deflation in finished products thanks to overcapacity. It is the worst possible world for equities, as corporations get squeezed on both sides. The asset deflation is also extraordinarily negative. I don't know if anyone around here read Zweig's old book "Winning on Wall Street" (or something like that) - he noted that inflation was bad, but pretty much put the skull and crossbones on deflation. We may have reduced the likelihood of inventory correction recessions with all our monitoring technology, but we've evidently enhanced capital equipment, credit, and asset-price driven cycles. BC