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To: Earlie who wrote (258135)	8/29/2003 4:39:58 PM
From: mishedlo	Read Replies (1) \| Respond to of 436258

higher values Higher VALUES or higher prices? M

To: Earlie who wrote (258135)	8/30/2003 3:11:56 PM
From: Lee Lichterman III	Read Replies (3) \| Respond to of 436258

Someone posted some of your thoughts on our site today and that reminded me of a post I had made on Friday. Wondering yor thoughts on this matter......... Monetary growth, MZM and Reserves are growing at an annual compounding rate in the teens. All this money sloshing around and we can't even get earnings growth above single digits industry wide. What we are going to see is going to be the need for more devalued dollars to buy everything, stocks, commodities, etc. Eventually, one would have to think that this would give the illusion of improved profits wouldn't it or will the raw material and other costs increase so much that earnings can't grow. I wish I was more economics savvy so I cold plug this into a formula to show if companies are keeping pace with any signs of pricing power. I haven't a clue where to begin to try though. I mean if it takes one dollar to buy a widget and costs to produce it are 50 cents and I make 100 of them, then my earnings would be $50 bucks. Now if due to a devalued dollar, it takes $2 to buy a widget (double) but my costs have gone up to $1 ( Double) but since everyone in the world is earning more devalued dollars as well they can still buy 100 widgets, my earnings would be $100. Wouldn't it appear to Wall Street like my earnings have doubled? never mind that those earnings can't buy me any more than my $50 earnings could or that if I was spinning this profit off as dividends it would enable them to buy any more of anything than the previous $50 dividend did but this could be spun as positive by the stock pimps and since it would also take more cut in half devalued dollars to buy a stock, my stock should also double not counting the CNBC stock pimp spin about how I am doubling my profits thus I deserve a PE of 600000. My point is, stock prices could go up, earnings could appear to increase even though business is not improving simply because of the injection of all this money that pages 3-6 of the Fed report are showing. Profit margins could remain the same, sales could remain the same yet the bottom line would appear to improve simply due to devalued currency. Worse yet, for anyone not getting the benefit of the investment increase, your saved safe dollars only buy a smaller piece of the pie. If the Fed continues to under report inflation as measured by energy, healthcare, insurance etc yet pumps cash into the system at the pace they are doing so now, anyone saving conservatively and only getting 1% yield is going to be eating dog food in the years ahead. Why is this scaring me so much. Have I ever mentioned this is going to end badly some day. -ggggg- Good Luck, Lee The mitigating thing I see is if the dollar craters, the foreign money flees and could thus take stocks down since they own about 40% of our market. Still , though commodities should outperform during the collapse, wouldn't this also make the bottom in stocks in this envirnment then make them a super buy like they were in the late 70s? My guess somewhere around 2010 though then you have to worry about all the baby boomers retiring and drawing money out.... Good Luck, Lee