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

To: LTK007 who wrote (21316)	1/12/2002 2:16:40 AM
From: LTK007	Read Replies (1) \| Respond to of 99280

Greenspan himself in today's speech brings out the danger of a double-dip recession <<With production running well below sales, the potential positive effect of the inevitable cessation of inventory liquidation on income and spending could be significant," Greenspan says. "But that impetus to activity will be short-lived unless the demand for goods and services itself starts to rise. On that score, despite a number of encouraging signs of stabilization, it is still premature to conclude that the forces restraining economic activity here and abroad have abated enough to allow a steady recovery to take hold. For that to happen, sustained growth of final demand must kick in before the positive effects of the swing from inventory liquidation to accumulation dissipate.">>

To: LTK007 who wrote (21316)	1/12/2002 8:00:25 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 99280

I agree that deflationary forces are likely to outweigh pro-inflationary for the next year or so. But at some point the huge money creation now going on will trigger a massive inflationary surge IMHO. Even deflationist Maudlin expects this. Even in the current low inflation environment lots of prices -- insurance, medical, supermarket items, housing, etc -- are moving up at a rapid pace. The key of course is the buck. Inflation will not be a major problem in the US as long as the greenback remains strong. But when the dollar finally topples in a big way, people will be amazed at how fast the inflation/stagflation bogey returns IMHO.