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To: pater tenebrarum who wrote (62211)	1/26/2001 5:01:12 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

Thanks for your comments. a possible development i envision is a mixture of inflation and deflation, with sectors that are beset by overcapacities falling prey to a deflationary spiral, while sectors that have seen a dearth of investment in recent years will inflate due to supply problems. and thereby INCREASE the deflationary pressures elsewhere, as both consumer demand and corporate margins get shot. This is likely, IMO. It fits with my understanding of market sectors. While the market as a whole may be moving up or down (based on the indexes promoted so heavily to the masses) individual sectors within the market may be moving counter trend, in their own cycles. It's also fits past experiences, where one region may be in recession while other regions are growing. The one thing that concerns me with this picture is the global capacity. For anything that can be transported easily, it would seem we have excess capacity on a global scale. And the excess capacity is really an illusion too. There would be plenty of demand for cars, for example, if the third world development of roads and personal income allowed for their consumption to rise towards industrialized levels. Based on this observation, I've heard it said that the real problem is the capital accumulation and concentration over the past centuries. That capital hasn't found it's best use, growing Rwanda as a nation, say. Now I know this is an oversimplification and that there are cultural issues- some tribes may prefer to live a simple life. But on a really big macro scale, there may be some truth here. I also agree that much of the increased leverage (debt) has gone to non-productive uses. IBM leveraging up their balance sheet would seem to be one example. I haven't done the study required to guage what percentage of debt created has gone to less productive uses. I agree on the sports stadium comment- but would also point out that the team owners usually con the public in to paying for them, twice. Once in the form of tax giveaways, land grants, public funding. Then again in the form of higher ticket prices. Now we shouldn't hold this against the capitalist business people who are smart enough to get such a deal, should we? <g>