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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (21314)	1/12/2002 1:41:41 AM
From: LTK007	Respond to of 99280

Deflation ,a dread thing;but when retailers had to slash and slash prices to get the consumer out and buying this fall and XMAS it is setting the table,as i have said,for deflation to take hold. So what has the wild price slashing accomplished.It cleared inventory,yes.But when they start rebuilding inventory and start putting on profitable prices won't they be in for a shock--"hey we loaded up at the cheap,we don't need your stuff now--not at those prices!" deflation raises it's head--yes i see deflation as major danger.Max

To: Crimson Ghost who wrote (21314)	1/12/2002 1:46:54 AM
From: LTK007	Read Replies (2) \| Respond to of 99280

i should add,i don't see this as a Japan only problem,as i just can't see where inflationary pressure is going to come here in U.S.Max Roach i feel has the best handle on the "double dip" of any i have read thus far---"Yes, the U.S. economy now seems poised for positive growth in (the first quarter) - an outcome that on the surface would seem to signal the end of recession," Roach said in his note. "But following on the tendency of five of the past six recessions, I suspect this pattern could well be reversed with a double dip commencing by springtime." <<In an interview, Roach said there was a two-out-of-three chance that a positive GDP figure in the current quarter could be followed by two more quarters of negative GDP, meaning the recovery would not begin until the fourth quarter. (MSNBC)>. from your post .Max

To: Crimson Ghost who wrote (21314)	1/12/2002 2:28:33 AM
From: LTK007	Read Replies (1) \| Respond to of 99280

Forbes raises issue of threat of deflation<<<<Fact and Comment Steve Forbes 01/07/2002 Forbes Magazine Page 23 Copyright 2002 Forbes Inc. SO FAR--PHONY STIMULUS The American economy should have been roaring back by now. Inventories have been slashed, the war on terrorism is proceeding successfully in Afghanistan and soon, elsewhere. Technology breakthroughs continue to proliferate despite the dot.com/telecom shakeout. Even some of the regulatory roadblocks are beginning to be removed, most noticeably by the Federal Communications Commission, which is finally raising and ultimately eliminating bad-service-inducing spectrum caps on wireless providers. But the economy is anemic, and the recovery--which should come by spring--won't be vigorous until two anti-growth villains are slain. Villain One: The Federal Reserve. Greenspan & Co. has made the same mistake as the Bank of Japan: lowering the price of money without providing adequate credit to the marketplace. Small and medium-size businesses in particular are suffering the credit version of dehydration. Moreover, bank regulators have been forcing banks to tighten lending standards. Deflation (pressure on prices) is now more of a threat than inflation. Those who can manage it are building up cash balances. When an item is scarce, you tend to hoard it. Villain Two: Last summer's tax cut. It was a mouse posturing as an elephant. The income tax rate reductions were inadequate and were diluted by being phased in over several years. We also need to take a vigorous whack at the capital gains levy, but even that remains unlikely. The final insult: The moratorium on Internet taxes was allowed to lapse last October. The International Monetary Fund remains the scourge of the developing world, mindlessly forcing countries to raise taxes (thereby deepening their slumps) and to depreciate currencies (which unleashes inflation, raising the cost of capital and motivating people to send their money abroad). Argentina is writhing from IMF-administered medicine, as is critically ill Turkey,a crucially situated, secular Muslim state. If the Fed, the White House and Congress could get their economic acts together, growth would quickly return (even in the face of new terrorist outrages) and stocks would once again strike sourpusses like Alan Greenspan as "irrationally exuberant." Until then, we'll be batting the economic equivalent of .250, instead of .375.>> end quote