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To: Abner Hosmer who wrote (11177)	5/3/1998 5:45:00 PM
From: Gabriela Neri	Read Replies (1) \| Respond to of 116906

That may be (concerning Japan) but the question is-what does that necessarily imply for our financial markets, the dollar, and the bond market. What are the consequences of a weakening Japan , a weakening Asia on us? Even the fed is concerned that the best news on inflation is here or behind us. A lot of confluences are happening simultaneously, such as weak oil prices, strong dollar, and low commodity prices. I have news for all of those who think inflation is dead-things change. The dollar has already started to weaken. The new euro can only be neutral to bearish for the dollar. It is not as if international investors just became aware of the euro. They have known of its commencement and have already adjusted to their fears of a potentially weak or uncertain currency(due to its newness). That phase is over and now and it appears that the euro has arrived for good against the odds and Europe is pulling out of its economic doldrums. Oil prices, in my opinion, will commence a gruadual and steady strenghtening. Commodity prices will not always be weak-they will eventually bottom and rise again. So, it is difficult to chest beat about the death of inflation because there are too many varialbles-not to mention the fact that the fed still isnt really sure why the inflation numbers are so well behaved. Stay tuned and flexible.