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To: Perspective who wrote (207273)	11/29/2002 12:40:46 PM
From: MulhollandDrive	Respond to of 436258

>>BOTH deflation and inflation are happening simultaneously. Deflation primarily affects finished goods, as it is a result of excess productive capacity. The Fed's response to the finished goods deflation has been to jam the money supply. While this is virtually ineffective in producing increased profitability for corporations and higher employment, it does jam hard asset prices higher - real estate, gold, and commodities. So, expect BOTH deflation and inflation for the forseeable future. Realize which is happening where and you can profit from it. Stick to buying commodities with low capital content (gold) and short corporate equity, especially where there is high capital content (semiconductors etc.) << bc.. i totally agree with your analysis. it appears that in the areas of nondescretionary spending..healthcare, taxes, food prices are rising. i suppose the silver lining is we have already exported our manufacturing base <g>

To: Perspective who wrote (207273)	11/29/2002 12:48:37 PM
From: Bid Buster	Read Replies (1) \| Respond to of 436258

yes i too think we have stagflation for now...but i'm from the school that believes pricing pressure is the effect rather than the cause of inflation. inflation = increasing money supply