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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (58005)	8/13/1998 12:30:00 PM
From: jhg_in_kc	Respond to of 176387

Chuz, here is a basis for fear. I just discovered Ed Yardeni is worried about a worldwide deflationary meltdown since late June. He says, picking up on his argument about forces unleashed because of the end of the Cold war: "The US economy was showing lackluster growth in the early 1990s. Faster growth started in 1994,but it wasn't until 1996 that American workers started to feel more secure about their jobs. Europe is lagging behind America by roughly four years in this transition from pain to gain. Asia is lagging even further behind in the restructuring process. Many countries in the region are even now resisting making the changes that are necessary to become more competitive. The financial crisis at the end of last year and the IMF bailout programs suggested that many Asians would move very quickly toward more open accounting standards, less support for failing businesses, and fewer protectionist barriers to trade and finance. Unfortunately, there seems to be a growing resistance to such changes. However, there really is no choice for Asians but to restructure their economies. As they do so, they will experience mostly pain. Importing Asian Deflation. The problem for Americans and Europeans is that Asia's economic pain is already visible in boatloads and planeloads of cheaper Asian imports. This is good for consumers of these products, but it means lower prices and profits for American and European producers. The risk is that Asia's current economic meltdown could trigger global deflation of the destructive, rather than the benign, variety, especially since inflation rates are already so close to zero. The import price index is down 1.4% from a year ago, the weakest comparison since the start of the data in 1983. This suggests that retail prices are likely to fall over the rest of 1998. Indeed, they are already falling:Deutsche Bank Research Global Economic Analysis / June 22, 1998 Yardeni advised his clients to have at least 25% of their accounts in cash. Will Asia's troubles trigger a short- lived but fierce deflation, forcing layoffs, the closing of plants, throwing people out of work, etc., to take an excess of product off the market? Yesterday the NY Times pointed out the Fed can fight inflation but doesn't know all that much about fighting deflation. I worry that this scenario could slow our Dell growth rate rather dramatically. I hope it does not happen. Any thoughts? jhg