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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Giraffe who wrote (18571)	9/13/1998 1:13:00 AM
From: PaulM	Respond to of 116764

Thanks. One of the few accurate assessments of the current dollar troubles IMO.

To: Giraffe who wrote (18571)	9/13/1998 1:44:00 AM
From: Sergio R. Mejia	Respond to of 116764

Global recession nearing? Saturday, September 12, 1998 By PETER MORTON Washington Bureau Chief The Financial Post Take a global currency crisis, toss in the possible impeachment of the U.S. president and the prospect of a worldwide recession no longer seems a stretch. Economists are becoming increasingly worried that what had been anticipated as a gentle slowdown of the U.S. economy will turn out to be more severe - especially as Washington indicates it may ease its strong US$ policy because of the fallout over the fate of Bill Clinton. "The first global recession since 1991 may now be well under way," said Morgan Stanley & Co. chief economist Stephen Roach. Some of the early indicators of a rapid cooling of the U.S. economy came on Friday with a sharp decline in the wholesale price index, which fell 0.4% in August, far more than predicted. "All in all, deflation is clearly prevalent in the wholesale index," said senior economist Cheryl Katz with Merrill Lynch & Co. in New York. The wholesale index showed steep declines in automobile prices, down 1.7%; a 4.5% drop in computer prices; and a surprising 10% drop in crude oil prices, she said. "Deflation - and not inflation - is the issue," she said, adding it is clear the U.S. is in a corporate "profit recession," something it may not recover from for at least two quarters. "Falling commodity prices show deflationary pressures are ensifying," said Deutsche Bank Securities Inc. chief economist Ed Yardeni. U.S. Federal Reserve chairman Alan Greenspan has already signalled the time may soon be ripe for lower interest rates. There are increasing calls from economists for other Group of Seven industrialized countries to follow suit to avoid a global recession. "Concern over price inflation looked, and still looks, silly with recession and depression in Asia and the Pacific Rim, slowing growth in Latin America and Canada, also in the U.K., and huge erosions in asset values throughout much of the world," said economist Allen Sinai of New York-based Primark Decision Economics Inc. Greenspan is scheduled to speak about the U.S. and global economies next week in the midst of a barrage of economic statistics, including the consumer price index, the Beige Book (the Fed's report on economic conditions published eight times a year) and trade balance. Roach said global investors are close to "creating a state of fulfilling panic," and all G7 countries except Japan should move together to cut interest rates by 50 basis points. G7 finance ministers meet Monday in London to discuss the Russian crisis and the global economy. Even without a co-ordinated approach, Roach said he is convinced the Bank of Canada will soon reverse its recent rate increase of 100 basis points, should Greenspan move to cut U.S. rates, something he could do as soon as the Sept. 29 meeting of the Fed. "We think the Bank of Canada would move to match any such action within nanoseconds," he said. "Given [Canada's cooling economy] and the risk of global recession in 1999, it would make sense for Canada to maintain a looser monetary policy than that of the U.S., rather than a tighter one."