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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Fiscally Conservative who wrote (15028)	2/3/2009 11:43:42 AM
From: jim_p	4 Recommendations Read Replies (1) \| Respond to of 50418

There is a world of difference between today and the 70's when PE's shrank over a long time period due to high inflation. Back in the 70's we didn't have the same level of excess capacity we have today and wages were driven higher by union pressures for manufacturing jobs despite high unemployment. The perception in the 70's was to buy today because it will cost more tomorrow and wages were forced to keep up with inflation due mostly to union pressures. Today it the exact opposite of the 70's, unions have lost a lot of their power to maintain wages and manufacturing jobs have left the country to places with excess cheap labor and little or no unions. The perception today is to save money due mostly to the dramatic loss of wealth and people are saving despite record low interest rates. Back in the 70's interest rates were at record highs and no one wanted to save for tomorrow, it was buy now or pay more later mentality. I do believe we will end up with high inflation, but that will be years down the road and I only believe that because of the risk the USD faces, the fact that the fed always goes too far and my lack of confidence in the current administration to get it right. Jim