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Thank you, I am glad that what I have said on this panel before is finally
recognized and brought forward by someone else. Thank you Earl. Ira.
Earl Adamy wrote:
> I reconsidered for a few moments and decided that my personal inflation had
> not disappeared. This is because I seem to purchase as much (if not more)
> from the service economy as from the manufacturing economy. All medical
> costs from insurance to dental are rising rapidly again. All travel related
> costs have risen significantly and costs are expected to rise 10%-20% this
> summer alone. The price increases I'm seeing in local real estate are
> amazing. Meals out cost more and the cost of a bucket of balls is up 33%.
> State and local taxes are up quite a bit. (Just a few examples.) I don't
> think inflation is gone at all, in fact the cost of services are rising at
> phenomenal rates, in large measure I believe to the vast amount of stock
> market profits which are chasing modest to high end goods and services.
>
> There is a lot of danger here! The US has allowed its manufacturing economy
> to be exported while it has developed a robust service economy. However,
> much of the service economy is subject to discretionary spending and it will
> go into recession when stock market fueled spending slows. Should the stock
> market tank, the service economy will too.
>
> Earl
>
> ----- Original Message -----
> From: <BOTTrader@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Sent: Tuesday, May 11, 1999 6:12 PM
> Subject: Re: Sv: FUT Gold, game up? Inflation reconsidered
>
> > "Inflation" as it is classically defined has to a great extent become
> > history due to: a) post-Friedman central bank monetary growth controls
> > Worldwide b) Greater levels of fiscal controls, especially the ERM
> standards
> > which the entire world now effectively has to shadow c) the "New
> Paradigm"
> > of the business cycle which is that, instead of "boom bust", we now have
> slow
> > growth & soft landings, meaning that as a cycle ages, interest rates have
> to
> > FALL to continue to stimulate demand (exact opposite of having to rise to
> > choke off an inflation boom in the pre-Friedman era ). BOTTOM LINE: The
> > likelihood of any sort of threatening "run-away" inflation is practically
> > zilch.
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