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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: Abner Hosmer who wrote (1236)	2/26/2001 1:57:02 AM
From: ahhaha	Read Replies (1) \| Respond to of 24758

"With economic growth weak and the factory utilization rates sitting at a recession like 78%, the idea that prices will accelerate this year is laughable. This is based on the argument that inflation comes from demand. Inflation comes from demand, people demanding and getting more in compensation than the economy can provide in return. This is independent of demand or supply, but certainly both factors will augment or mitigate the degree of inflation. Further, it isn't important what can be excused away over the short run, i.e., this year. The rising floor is in place. One need only look at a long term chart of CPI. It has always risen and now it's accelerating upward just like money supply, but the demand managers will assure you that there is no connection. Specifically the report states that factory utilization is weak. I didn't realize that the US economy was so big into manufacturing. We exported much of that decades ago because foreigners are willing to work for less. Interest rates impact the weakest links first and manufacturing is notorious for low margins and heavy financing debt. Consider the other side of that coin. If utilization is so low at the peak of an economic expansion, then what will become of it as things get worse? Why is it at a low? The reason is that we are inefficient in manufacturing primarily because the Democrats raised taxes and kept them high for years. Under that kind of regime manufacturers don't have the wherewithal to invest to upgrade equipment or technique regardless of interest rates. Borrowing is riskier than contribution capital in manufacturing. The result is the inability to compete and one measure is high levels of unutilizable capacity. I notice they don't tell you how high the utilization got in any year of '90s. It never got higher than 82%. In the '50s and '60s it got into the low '90s. Why don't they explain away this discrepancy? .. How anyone can worry about inflation when commodity prices are so depressed is beyond us. The CRB spot industrial index is currently at a 14 year low. This is an attempt to discount what is more than evident, rising prices. It's so funny to watch these little boys make these comments. Like with the CPI they separate out what they need to support their prejudice even while the emperor walks without his clothes. But let's look at this claim. 14 years ago was 1987 or 1986. Presumably that was a low in something or other. According to the Democrats it was a boom period due to unfair tax cutting. Apparently the spot industrial commodity index is at a low near boom peaks. Why not worry about stagflation? First, because much of the increase in the PPI and CPI was either temporary or fluky.Second, and more important, inflation is a lagging indicator... Within a few months we will probably see deflation concerns mount". Well, if we are entering into deflation, then FED must increase the rate of fiat money creation. They're pumping at one of strongest rates in history and they're doing it with total disregard of the M2 money supply. How can we be entering deflation with M2 accelerating? All the money is going to foreigners? If that's the case, there is no way to turn the deflating economy around, and so we are headed for depression. Also, why would FED persistently engage in matched sales to prevent the fed funds rate from dropping? If we are entering deflation, they want the fed funds rate to drop as rapidly as it will. Why is FED concerned? Anyone can review the reports from the Richmond and KC Fed districts concerning a very worrisome strong prices paid rate and strong prices components. How is this possible? It is possible because the imbecile fools in our society haven't got a clue about what is happening. They don't buy things. Their wives do. Not that that means anything. Many people have so much money that prices don't matter.

To: Abner Hosmer who wrote (1236)	2/26/2001 11:10:04 AM
From: ahhaha	Read Replies (2) \| Respond to of 24758

How would ML discount this: Monday February 26, 10:09 am Eastern Time U.S. Steel raising prices, sees market bottoming out PITTSBURGH, Feb 26 (Reuters) - USX-U.S. Steel (NYSE:X - news), the No. 1 U.S. steelmaker, said on Monday it will raise prices March 1 on most of its steel products by $30 to $40 a ton in anticipation of an economic recovery. Pittsburgh-based U.S. Steel, which raised prices on Feb. 11 for its plate steel products by $10 to $15 a ton, said it would increase its prices for hot-rolled steel by $40 a ton effective March 1. The company also said it would increase prices for cold-rolled and coated steel by $30 a ton on March 1. ``We think the market has bottomed out and we're starting to see signs of a recovery and we think it's appropriate to now announce price increases,'' said Mike Dixon, spokesman, in a telephone interview with Reuters. ``We think this is somewhat of a turning point in an economic change and our industry was leading this softening of the economy by a long way.'' Dixon would not say how much U.S. Steel would increase its production, but said the company would watch the market closely and it hopes to get above the 75 percent capacity it was producing at in the fourth-quarter of 2000. They're raising prices at 75% capacity.