Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (22989)	10/26/1998 8:13:00 AM
From: Glenn D. Rudolph	Respond to of 164684

Global Deflation Specter Raised ---------------------------------------------------------------------------- ---- A.P. INDEXES: TOP STORIES \| NEWS \| SPORTS \| BUSINESS \| TECHNOLOGY \| ENTERTAINMENT ---------------------------------------------------------------------------- ---- Filed at 4:05 p.m. EST By The Associated Press NEW YORK (AP) -- In Brazil, once the problem child of hyperinflation, prices for food and clothing are sliding. Apartment owners who refused to lease units during the days of high inflation are now slashing rents. In Japan, food, beer and household goods cost less than a year ago. And prices for commercial land are off a staggering 63 percent from 1992. In China, the government has ordered companies trying to get rid of excess goods to halt price wars. >From Asia to Latin America, consumers once victimized by surging prices are experiencing a new phenomenon: lower prices on a broad range of items, from crude oil, gasoline and farm commodities to computers and new cars. ''For the first time in decades, there is widespread price deflation going on in much of the world,'' said Allen Sinai, chief global economist at Primark Decision Economics. Tumbling prices offer relief to consumers weary of paying more every year for many products. But just like inflation, its flip side, deflation, or falling prices, can pose risks and uncertainties for consumers, companies and the global economy. With the Asian financial turmoil pushing many economies into recession or at the edge of one, analysts worry about the consequences of a serious bout of deflation, the kind that would pull prices down not only for food and clothing, but also for stocks, houses and other assets. In a deflationary spiral, workers' wages would fall, leaving less money for bills and other payments contracted at higher prices. Consumers would find their key asset -- their homes -- losing value. Buyers waiting for prices to fall further would postpone spending, dampening economic growth. Businesses counting on stronger prices for their products would earn less than expected. With smaller -- or no -- profits, they would have difficulty paying wages and keeping current on debts. Bad debts would mount at banks, which would curtail lending. No one is yet predicting such a destructive cycle in the United States, but economists are seeing more signs of falling prices and assessing the risks to the economy. ''The prospect of deflation was laughable a year ago,'' said Greg Mastel of the Economic Strategy Institute in Washington. ''Now it is a real risk (although) a low percentage risk.'' Federal Reserve Chairman Alan Greenspan even expressed concern recently about the prospect. ''Deflationary forces are continuing to emerge,'' he said in congressional testimony. The possibility of widespread price declines causes unease because the last time there was a sustained period of deflation was during the 1930s Depression. But economist Kurt Karl of the WEFA Group in Eddystone, Pa., said, ''It would take a big recession in the United States and a collapse in asset prices'' to set off a deflationary spiral in this country. ''It's hard to see that happening,'' he added. The current round of price weakness in this country has its origins in the financial chaos that began more than a year ago in Southeast Asia. With Asian economies weakening, demand for crude oil and other commodities skidded, pushing prices lower. Price-cutting by Asian manufacturers has forced American companies to lower what they charge for such goods as computers and new cars. American farmers have been especially hard hit by stumbling prices for beef, pork, corn and other goods, which Asian nations had in recent years snapped up in large quantities. So far, U.S. consumers have benefited from the price plunges. In the United States, the inflation rate for the first nine months of the year was a mere 1.4 percent -- better than the 11-year low of 1.7 percent recorded for alì ïæ ìáóô ùåáò®Ÿ…= ÁÐ–ÎÙ–±°–”µ–'¸ ±µµ¸ÅÓÔŸ…Ÿ…Ÿ…ˆˆ™Ö°“'¶ƒ–––––…ò æ„Œ ª±“±°ÞÁÐ–Íéäåáóô–Äïìäòõí ±°–”µ °¸'µŸ…Þª±“±°* ÞÁÐ–Íideast-Doldrums,0894 Financial Fallout Hits Mideast