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To: reaper who wrote (225163)	3/4/2003 9:56:25 AM
From: ild	Read Replies (2) \| Respond to of 436258

Adding to COST? They report tomorrow.

To: reaper who wrote (225163)	3/4/2003 10:19:57 AM
From: Perspective	Read Replies (2) \| Respond to of 436258

<I guess the operative word here is "jam"> Actually, if the deflationary scenario takes hold, even gradually falling long-term rates could effectively raise inflation-adjusted interest rates, if prices fall faster than interest rates. Right now, depending upon whom you ask, you might hear that real interest rates are negative. I believe that they are, from the perspective that I'm losing effective purchasing power by holding a treasury bond. That's why I remain focused on holding short positions and gold - the former because this is the worst possible operating environment for corporate America (corporate equity is useless in a world awash in capacity), the latter because the smart money is figuring out what that nutcase Bernanke is talking about. I'm already having visions of what the run-for-cover to anti-paper will do to the prices of hard commodities. BC

To: reaper who wrote (225163)	3/4/2003 10:23:07 AM
From: Perspective	Read Replies (2) \| Respond to of 436258

A word on "excess capacity": When you look at all the impoverished peoples of the world, it's hard to see how the planet has too much to go 'round. I note here that the "excess capacity" means excess given the current global pricing environment. The capacity will ultimately be put to use, but the pricing mechanism must adjust so that the goods are diverted from US consumers that have insufficient goods and services to barter for them, toward the billions globally that do have things to trade for them. BC

To: reaper who wrote (225163)	3/4/2003 10:35:02 AM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 436258

<<goods prices are set by the cost of marginal production, not by currency regimes; and believe me, with all the excess productive capacity in the world right now the cost of marginal production is exceptionally low, and frankly more likely to FALL than to rise.>> This only continues as long as marginal producers stay solvent. If inputs from basic materials (read: CRB) continue to rise, a lot of this production goes to capacity heaven. <<'surprise' is going to be that the blow up of that trade will be brought on by LOWER rates that are indicative of deficient demand and earnings power, not HIGHER rates which is what everybody else is counting on to kill the housing market.>> Care to elaborate on this a bit...low rates are going to blow up the mortgage trade? I think excessive supply of mortgages and of government debt will do it, but I guess we can work lower in the meantime. Of course, just as you blamed rising oil and commodities on the war in Iraq, I can blame the recent rise in treasuries on "safe haven flight" caused by the "war" in Iraq...na, na, na, no tap backs!<G>