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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Sam Citron who wrote (3239)	10/31/1997 1:38:00 PM
From: Sam Citron	Respond to of 10921

S. Korea Won per $US today 964.60 10/8/97 916.00 10/8/96 829.00 Good article from DJ at interactive.wsj.com Excerpts: The real question is whether the U.S. and Europe can absorb an expanding number of lower-priced Asian goods. For now, the effects of falling Asian-goods prices remain mostly benign abroad. Lower import prices help keep inflation and interest rates down. But Asia could propel the West into a deflationary scenario if price pressure and currency devaluations continue. "The good news is that the U.S. has been able to continue on its relatively high-growth path without inflation because we are importing deflation from Asia," says John Makin, a fellow at the American Enterprise Institute in Washington. "The bad news is that if Asia's excess supply problem is bad enough, the problems will be transferred to the West." Deflation might prove a minor roadblock if it weren't for Asia's growing glut of manufacturing capacity. At its core, deflation is simply too many goods chasing too little money. Asia is drowning in excess goods, the product of years of overinvestment. "Asia's problem is an obsession with production," says Jesper Koll, an economist at J.P. Morgan. "Everyone has been investing too much. They sell the goods at any price they can get." Indeed, manufacturers have added factory power at a furious pace this past decade. Consider a snapshot: Japan's decade-long Asian investment spree starting in the mid-1980s built factories with three times France's total manufacturing capacity. China and Korea now produce more steel than the U.S. and the U.K. combined. China's annual output of 30 million television sets accounts for a third of world production. SC