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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: BWAC who wrote (48463)	6/5/2003 10:16:52 AM
From: E.J. Neitz Jr	Read Replies (2) \| Respond to of 53068

The biggest "red flag" is the recognition by the Federal Reserve that deflation is a concern. That in itself is historic. The equity markets are euphoric over the Fed's signal that it may drop interest rates to counter this problem. The troubling part is the degree and length of time the Federal Reserve has been decreasing rates and how little the economy has responded to those rate decreases. The Federal Reserve, despite what they say publically, is running out of options and the US is moving closer to a model of the early 1930's. Should the US avoid that 1930's model, those buying stocks today could be richly rewarded. If the US moves into deflation further, than the only ones to escape financial loss will be the one's that did so in the early 30's and in Japan: holders of US Treasury Bills and short term notes possibly gold(physical asset or derivative)and select non-US foreign government(Swiss) treasury equivalents. I am certain of one thing: I have no idea how this will play out. Neither does anyone else. The only other certain thing is that the Mutual funds and brokers need "fresh money" and will pump and spin to achieve that objective. Enough said. Back to hibernation.