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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4891)	10/17/2001 6:48:57 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 33421

And let's not forget we've got WWIII and Armegeddon looming in the background too. <g> Seriously, that is a nasty, nasty scenario you have described. Slider's point about terrorism being inflationary is one to ponder. And I agree with it IF the net result would be similar to the oil embargo of the 70's. We saw incipient inflation which tailed off when oil price rose above $30 last year. We also saw business suffer when natural gas spiked. Funds literally siphoned off other spending just to "keep the lights and furnace" on. And there is no question in my mind that we are still "contracting" and the ripple effects of the layoffs and pay cuts have yet to be fully evident. I've also felt for weeks now, that we won't truly know the cost of the WTC/Pentagon attack for months and months to come (maybe years, if you factor in opportunity cost). But when you say that the new cry will be for money creation to ease the pain of deflation, I guess it goes to the crux of my question which was why was it necessarily a mechanism that would be so clumsy as to set in motion inflation. It sounds as though you are saying no amount of "tinkering" around the edges will alleviate the pain of deflation.... and that the cure is as bad as the disease. One worry that I have is the broad exposure today to the equity market. In previous bear markets the average person was affected, but more on the periphery, as they had little or none of their personal wealth tied up in the stock market. Because of that, the hue and cry could become deafening. Again, not a pretty scenario.