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To: 007 who wrote (21978)	5/14/1998 11:14:00 AM
From: mc	Read Replies (1) \| Respond to of 95453

007, don't believe all the hype. For all the talk of budget surpluses, there really are none. The reason the government will supposedly run a surplus is because of Social Security. SS is currently taking in more money than it is paying out in preparation for the baby boomers to retire. If you back out SS receipts and outlays (and this is a legitimate way to assess the situation because all SS receipts that are not deposited are still owed to the SS system, meaning they will have to be repaid and are, thus, in fact, equivalent to issuing debt) then you'll see that the normal operations of the government are still running a deficit. Additionally, when the boomers do retire, even counting all the IOUs in the SS accounts, there will still not be enough money in SS to pay them all. This is what all the stink is about regarding SS reform. I'll agree that Greenspan has done a good job, but, there are things on the horizon that could lead to a tightening which may send this market down big time. With the Euro coming, the dollar could partially be replaced as the reserve currency of choice for central banks around the world. This could cause weakness in the dollar which would raise import prices and possibly be a precursor to inflation. We know what Greenspan will do in this case - up goes the discount rate and like a chain reaction the bonds, fed funds, prime rates, and everything else will go up. Of course, this would also raise the price of imported oil which would make GOM exploration and drilling more likely. It should be really interesting the next year or two. I hope the government doesn't run off and start spending all this imaginary "surplus" we have. And Europe is a major unknown that will impact our economy and markets greatly. Good luck, Gary