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To: Bid Buster who wrote (133652)	11/9/2001 8:46:12 AM
From: Lucretius	Read Replies (2) \| Respond to of 436258

that won't come till next yr imo. fed is sowing the seeds though

To: Bid Buster who wrote (133652)	11/9/2001 9:17:02 AM
From: Oblomov	Respond to of 436258

The "false spring" or "pulse" (to use the Schumpeterian term) occurred during 1999-2000. Inflation does not necessarily surface in consumer goods. In the case of 1999-2000, it appeared in housing prices. There is no guarantee that consumer goods inflation will occur following this deflationary bust - the "reflation" of 1949-1981 was, IMO, driven by many factors other than the interest rate cycle. The inflation of 1949-1981 was also a result of 1) the 1946-1964 baby boom 2) the growth in the size, sophistication, and reach of the money markets 3) the release of the pent-up savings of Americans who lived through the Great Depression 4) the emergence of a consumer economy 5) the Viet Nam war, and the "guns and butter" fiscal policy of the US 6) the widespread extension of credit, and the emergence of credit securitization (see #2) 7) social changes, widespread distrust of authority, political scandal Some economists claimed during the 70s that inflation was being caused by repatriation of the USD, but I don't buy that argument. Note that most of these can't recur - i.e. we can't invent the credit card again, and the savings of a majority of US households has been tapped out. The social climate is conservative, and will probably become more conservative as the median age of the population increases. Defense spending might provide an inflationary stimulus here, but what other current social phenomena are inflationary? Things will change in the future, no doubt, but the current trend is deflationary. JMHO.