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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: CPAMarty who wrote (27480)	1/3/1998 10:49:00 PM
From: BillyG	Read Replies (3) \| Respond to of 50808

Greenspan on deflation.................. biz.yahoo.com Saturday January 3, 2:20 pm Eastern Time Faulty data cloud U.S. deflation debate--Greenspan CHICAGO, Jan 3 (Reuters) - A growing debate in the United States over the potential threat of deflation is hampered by faulty price measures and lacks clarity, U.S. Federal Reserve Chairman Alan Greenspan said on Saturday. In his most detailed comments on the issue yet, he avoided taking a stand on whether a danger of falling prices existed in the U.S. economy but said this force could be at least as destabilizing as a pickup in the general price level. ''Even if deflation is not considered a significant near-term risk for the economy, the increasing discussion of it could be clearer in defining the circumstance,'' he said in a speech prepared for delivery to the American Economic Association. Inflation had declined to the point where even an upward bias of a few tenths of a point mattered, he said. ''Inflation has become so low that policymakers need to consider at what point effective price stability has been reached,'' he noted. Turning to Asia, he said a gradual fall in asset prices had contributed to the recent financial crisis there, but added that in most cases this type of deflation could be absorbed by the economy. ''But historically, it has been very rapid asset price declines -- in equity and real estate, especially -- that have held the potential to be a virulently negative force in the economy,'' he said. ------------------------- Greenspan also said that there has been a tendency recently for some investors to panic because they, like Chicken Little, worry that the sky is falling. He said, "It is a Rare Bird that can predict these types of events." [See the link for the unedited text. ;-)]