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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: gfs_1999 who wrote (76945)	5/13/2001 8:36:31 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 99985

gfs, I think that the fed are succeeding in avoiding a recession this year, but, and here is the caveat, the free money printing is going to bring a period of "pay the piper" next year. Since you are an economist, look at the big picture, right now, the avoidance of a recession is based on the consumer not retrenching. That means that the consumer might get even deeper in debt. Furthermore, without a consumer retrenchment this year, our imports are going to sky rocket again (without much compensation from our exports, more directed to corporate investments and infrastructure investments over seas), thus, by this time next year, we may very well be faced with monthly trade deficits in the $40 B per month. To stop that bleeding, a real recession may be required, IMHO. If you look at the data Haim provides from the feds, money has been in heavy printing for some time, with all the "foreigners" using the dollar as their de facto currency, I am not sure if an exact forecast of the impact of that money on inflation is possible, but, it cannot be too positive. The good thing, of course, is before that time next year, we are going to have a liquidity driven market rally of major proportion later this year and during the first quarter next year. Before we go into that Nirvana state, however, I feel a little more suffering may be required, and particularly, we need sentiment indicators to get to the range they were in mid May last year. Zeev Zeev