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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Rmn who wrote (8594)	11/19/1997 9:14:00 PM
From: Joss	Respond to of 18056

Ramses, BINGO! Steve

To: Rmn who wrote (8594)	11/19/1997 10:52:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 18056

Ramses, I am not sure our FED's can print Yens that easily, but that might not be a bad idea. Zeev

To: Rmn who wrote (8594)	11/20/1997 10:03:00 AM
From: Tommaso	Read Replies (1) \| Respond to of 18056

Inflation can be caused either by an excess of money or by a decline of goods and services available to be purchased with money. Both things happen when a country wages war. More money is created, and simultaneously both labor and materials are put into economically wasteful things and purposes (i.e. marching in straight lines, shooting people, burning cities, and exploding shells and bombs). In peace time, with a controlled money supply and a rapidly increasing manufacturing base for consumer goods, plus millions of people performing services, prices can easily decline. Milton Friedman was wrong. Inflation is not always and everywhere a monetary phenomenon. Keynes was wrong. Money does matter. But it is the balance between money and what people want to spend money on that determines prices. Right now, it looks as if there are so many things to spend money on that price inflation for most goods and commodities is unlikely. There are some exceptions. No further Van Gogh paintings can be produced. Manhattan cannot be expanded. There is perhaps fortunately only one Michael Jackson. There are limited numbers of top-notch athletes. DeBeers limits the number of diamonds placed on the market. (These prices also depend on what people care to spend money on. And some important things are free, or very cheap, such as air, water, school teachers, and clergymen. Food is outrageously cheap in the United States. I could get hugely fat on one hour's labor at minimum wage per day, and probably buy some booze as well, by shopping carefully.) Common stocks seem to me outrageously overpriced, especially some of the technology stocks. I have just put an order to double my holdings of BEARX, the Prudent Bear Fund, which shorts 80-100 apparently overpriced stocks. BEARX has just reduced its long position to only 10% of its holdings.