Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: reaper who wrote (67041)	2/21/2003 10:21:44 AM
From: JRI	Read Replies (3) \| Respond to of 209892

Anyone want to piss Shack off, and talk wiggles with me? g Woopsie-daisey...potential wiggle impulse here/now....close to some real action Jackson (nah, its expiry-g) Thread looks like summer 2001 this morn-g

To: reaper who wrote (67041)	2/21/2003 11:21:42 AM
From: Perspective	Respond to of 209892

People just don't understand deflation at all. I guess nobody bothered to remember that stuff, since we're too clever to ever have "it" happen again. A refresher: in deflation, the cost of finished goods falls faster than the cost of the inputs due to collapsing credit creation by purchasers of finished goods. This destroys the value creation by corporations. Companies squeezed between inflexible costs of inputs and collapsing end demand see their return on assets plummet. When it falls below cost of capital, capital formation ceases. If return on capital goes negative, no level of interest rates can re-stimulate capital formation in the short run. The monetary yardstick can be tinkered with to make sure that the existing debt loads don't become magnified by falling prices, but the primary deflationary force - suffocating debt levels - must be alleviated before demand and employment growth can return. One of the symptoms I expect to see is that CPI-PPI will probably go negative, as finished goods prices fall faster than the cost of inputs. And if PPI is rising, well that's not all that helpful to corporations if the CPI is stagnant, now is it. BCbriefing.com - we read the history books 'cuz we know nobody else bothers. BC