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To: DD™ who wrote (7708)	9/6/1998 1:18:00 PM
From: Jim S	Read Replies (1) \| Respond to of 42834

2D and Skeet: I'm enjoying your conversation about the impact of overseas economics on our market. I can't help but try to complicate things even more by tossing the following into the conversation: There is not only economic instability, there is also considerable political instability accompanied by sabre rattling that may well lead to outright hostilities. -N. Korea launched an intermediate range ballistic missile -Iranian forces are having full scale exercises on the Afganistan border -India and Pakistan (both nuclear powers) are in a low intensity conflict -the continuing deterioration of former Soviet satellite countries, many with nukes, is accelerating because of the crisis in Russia -while things are going poorly in the "--istan" countries, they are not improving in the "--vakia" countries either -as a crowning event, the US declared "war on terrorists," what ever that might mean This isn't a comprehensive list of problems in the international realm, but any one of these could trip the circuit breakers that have kept the world in relative peace for the past few years. And, if any of those circuit breakers trip, the uneasy world economic balance will become even further off center. My bottom line is that I don't think that things look especially rosy for the near to intermediate term. Moreover, while I'd really like to see Clinton become a private citizen again, it concerns me that his troubles are preventing us from seeing beyond our own borders.

To: DD™ who wrote (7708)	9/6/1998 1:52:00 PM
From: DD™	Read Replies (1) \| Respond to of 42834

Higher interest rates when added to an underpinning of deflation can further slow the economy, i.e., stagflation DD

To: DD™ who wrote (7708)	9/6/1998 6:12:00 PM
From: Skeeter Bug	Respond to of 42834

double d, let me in on your thought process. if japan dumps bonds then interest rates go up to attract buyers. how else does this impact the economy. it costs more to borrow for cap exes, but we already have excess capacity in front of what looks like falling demand. as for asset deflation - you bet it is deflationary. a point or 2 will definitely put the clamps on real estate, bond and the stock market. these markets would go down (deflation), right?. how would it increase the cost of gold, cars (push the price down, right? more interest then less for the car), groceries, education, etc? one may suspect that increased costs of doing business would be passed to the customer but it appears nobody has any pricing ability due to near oversupply conditions. again, let me know your thought process. i'm interested in a different viewpoint.