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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: uu who wrote (23724)	3/20/2001 4:49:59 PM
From: sea_biscuit	Read Replies (3) \| Respond to of 25814

Addi, Just happened to wander over here... The bursting of the tech bubble has led to a slowdown in the economy that nobody could have imagined. The Fed has to be pro-active in cutting interest rates, even at the expense of inviting inflation. I think most people would agree that inflation levels of 3.5% (where the purchasing power of money is halved every 20 years) are tolerable. Hopefully, we won't succumb to the actions of the inflation hawks in the Fed who would oppose interest-rate cuts if inflation creeps up. If anything like that happens, your best bets are : cash, zero-coupon bonds and long-term Treasuries. Any other kind of asset (stocks or real-estate) will keep declining in value. And it is the latter (declining real-estate values) that makes a deflation so scary. With inflation, at least one portion of your portfolio (real estate) will hold up while the other portion (stocks, especially large-cap stocks) tank.