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Pastimes : James Cramer Skeptic Thread -- Ignore unavailable to you. Want to Upgrade?

To: Carmine Cammarosano who wrote (821)	10/19/1998 3:18:00 AM
From: taxikid	Read Replies (3) \| Respond to of 1254

no, it is not "recession" that is the problem. that could be healthy, as a speed bump, but the problem would lie in a deflationary spiral, that combined with shortage of goods, that could lead to the devaluing of goods(already happening), non-production of goods, as capital deployed elsewhere..(like speculative markets){again done recently} would bring higher returns. big money always goes where the highest profits are derived. So since doing biz was/is less profitable than trading or speculating, goods won't get produced, factories, etc get auctioned off and less competition exists. workers get paid less, can buy less, and get laid off. the cycle leads to mass unemployment,balance of trade deficit,(we import more than we export) and since the rest of the world seems to be producing many of our goods, where our dollar is stronger, as it becomes weaker the deflationary cycle whipsaws into an inflationary cycle that will not be restricted or constrained by those such as greenspan. sure those that monopolize the factories will do well. most of the people i know will take it in the brown eye. i can go on and define how this happens... as the value of the buck goes down, foreign countries will want out of it.... further devaluing it, and firming their own currency.