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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (39238)	7/19/2001 11:51:01 AM
From: Jim Willie CB	Respond to of 65232

reasons why this recession will probably not get ugly the biggest risks are with foreign economies and US housing the external shockwaves I see coming may be endured quickly and housing may droop slightly, but doubt for long time many reasons why only a brief recession: 1. interest rates are relatively low on historical basis 2. we are benefiting from no cold war and its drain 3. we have an enormous money supply growth underway 4. housing has held up well 5. unemployment is still way under 5% 6. certain commodities are up in price 7. small cap stocks since 1998 are historically very strong there was a time when incompetent economists believed we couldnt have unemploymt under 5% without huge inflation now we have it in the midst of a strange non-uniform recession the lack of a cold war eliminates 1-1.5% drain on GDP such an inefficient usage of human and material resources the early 1980 recession under Reagan (but due to Carter) was accompanied by serious inflation that is not present now but I look forward to when the recovery finally arrives in about 5-8 months we are very likely to see a rise in baseline inflation energy costs will rise again worse than before we have entered the New Era of Shortage key commodities like oil, methane, gasoline, electricity are way up in price this almost NEVER happens with recession getting worse it surely costs more and hurts consumers and businesses but it also encourages the industry to respond and they come alive with innovation, research, and activity read an interesting point recently about small cap stocks they have risen relative to large stocks substantially since 1998 this tends to lead to a couple of conclusions first, no recession, or at least not a deep one second, imminent changes in inflation, which I fully expect a strange new reality has become so clear with the completely intertwined world economy and burgeoning debt WE CANNOT AFFORD A SINGLE RECESSION we would not get just a garden variety recession IT WOULD BE A WORLDWIDE DEPRESSION I see some summer shockwaves coming some foreign lands cratering from their fragility and failed policies some August retests of lows whether new lower lows, I am beginning not to care / Jim