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Re: Deflation?



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The problem in the manufacturing areas of the economy especially is that the
supply of new capacity tends to run ahead of demand for sometimes quite long
periods as companies have a herd mentality with regard to investment. This may
mean deflation for a period until supply comes back into balance with demand.
Some industries such as steel have now gone the more flexible mini mill route
to supply expansion instead of the giant route which was the conventional
wisdom a few years ago.


Bob Jones