To: Hawkmoon who wrote (8647 ) 1/26/1998 9:53:00 AM From: Charles A. King Respond to of 13091
30% decline in the stock market? The coming few years are loaded with looming problems on a massive scale, in my opinion. Some problems are, not in order of seriousness, that Europe intends to switch to a common currency in 1999, which I don't think will work. I think those European countries will be immersed in financial turmoil and I don't know how that will play out. Meanwhile, that man-made problem will distract them from other massive problems that are developing. Several countries in Southeast Asia are in serious difficulty. Their governments and banks made many bad decisions resulting in huge investments that didn't make economic sense. They are now coming to us and the Europeans to bail them out of their messes. But we are between a rock and a hard place. How do we taxpayers make sure that private creditors, particularly large banks, pay the price for bad loan and investment decisions while at the same time avoid risks of widespread financial collapse that could hit our economy with a vengeance. Simply bailing them out could encourage even more reckless lending. Then there is the Y2K mess that we must see play out. Have the CEOs that run companies taken care of their duties with regard to that situation throughout the world? What about government computers, especially in the Far East? The price of crude oil is collapsing. I doubt it will drop further, but I don't do well in predicting the future, especially predicting other people's decisions. You can see that in my past opinions about what would happen with GRNO. Analyzing the effect of several parameters affecting the price of oil seems to have lead to the assumption that there is a massive glut of crude oil in the world right now. This isn't going to do GRNO any good as well as other energy producers, but will be good for our prospects for inflation. What may be of more importance is our prospects for deflation. Cheap goods will now flood our markets as well as cheap oil, and our companies will find it even more difficult to raise or even maintain price levels. Japan, Korea, and Southeast Asia are paying the price for asset inflation. Japan still hasn't begun to recover after struggling for several years. Japan interest rates have been miniscule to try to deal with the collapse of its once-inflated asset base, but it still hasn't recovered. I think that once GRNO gets on its feet and is able to establish an operating entity, its profit margin will be such that it will be able to sustain any turmoil that goes on in the world, including deflation. But until that happens, GRNO must sell plants to other entities, and if those prospective customers are scared off by other fears, times will continue to be difficult. Charles