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To: Giordano Bruno who wrote (344889)	10/4/2007 9:11:30 AM
From: stan_hughes	Read Replies (1) \| Respond to of 436258

WTFDIK, but I believe there is a train of thought at the Fed that believes that the inflationary pressures that should otherwise create a stagflation situation as the economy slows down will be naturally offset by the deflationary pressures forming associated with housing Ergo, you will certainly get a slowing or standstill US economy, but you won't see net-net-net inflation to create so-called stagflation -- although what you will get is a whole lot of nothing going nowhere, and that's not such a great picture either The relative value of the dollar is a bit of a wild card value in whether things work out that way -- if it gets too low, the US will end up importing some inflation in the form of higher-priced consumer and other goods, but at the same time the US would in effect be exporting its recession to other countries by "dropping its prices" if you will At the moment the ROW isn't very happy about that prospect, especially the Eurozone -- Message 23934395