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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: coug who wrote (40023)	5/16/1999 2:16:00 AM
From: Follies	Read Replies (2) \| Respond to of 94695

Coug, You have the wrong definition of inflation. Inflation is the increase in the monetary base. Rising prices is the usual symptom of inflation but not necessarily, or at very least you have to look at all prices. The price of companies, the means of production and innovation has been rising 20 - 30% /year for the past several years, not just rising prices but rising PEs is inflation. Homes here in Silicon Valley (albeit IPO-Internet Ground Zero) have gone to absurd valuations (sound familiar). The difference between those and yours are that the items you mentioned are all produced items that technology can lower the cost of production. Lowering the cost of production masks inflation. I am starting to believe we are at the dawn of a new age of technology that will reduce the price of producing anything to the cost of producing the atoms, carbon, silicon, hydrogen, gold, kryptonite etc. Of course bigger items will cost exponentially more. Imagine you had a microwave that when you put the baked potatoe in, five minutes later you had two baked potatoes. Your next trick would be to put a hundred dollar bill in and sure enough you would have two hundred bills. Atomically identical!! You think, why stop here, and you put your VISA card in and viola, you have two cards but your credit limit didn't change, you think oh shoot, that didn't work. "make note to self, e-money maybe safer than real money." You put in 100 share certificate of AOL and sure enough you have two hundred share certificates, but AOL has a "logical", non physical record of your shares so at first they say sorry you only have 100 shares but everybody is doing it so AOL says okay, everybody now has two hundred shares (sound familiar?) I know I sound like I am talking Science fantasy but unless mankind kills itself, it will happen 200, 500 1000 years from now, a machine will be built that will do just that. Value will be in contracts, deeds, ownership, patents, knowledge. Inflation?, I want to buy any of those things at 1995 prices. On the monetary front I think inflation as measured by the CPI, PPI etc. has bottomed but that will only attenuate the rise in price of the new store of values, real estate and the market. That is why BK is a myth (so why am I short?) Dale

To: coug who wrote (40023)	5/16/1999 9:27:00 AM
From: J. P.	Read Replies (2) \| Respond to of 94695

I think the inflation is in equities. Equities right now are selling at multiples far above historic levels with regards to growth. Corporations have limited pricing power, but feed from their asset bubbles (look at how IBM derives their EPS, look at employee option programs). Also commodity prices are coming up off the floor (I've heard the term 'reflation' used for this) and oil is up 50% from the recent bottom. May or may not be an impending disaster, may or may not be an equity bubble. Maybe this is a new era where the rules have changed.<g>