SLOWING OF ECONOMIC CONDITIONS: The American Iron and Steel Institute reported that capacity utilization has fallen to 76.1 % of its capacity compared with 79.4 % the previous week and 92.1 % a year earlier, which is a fall of 17.37 %. The International Energy Institute in Geneva, Switzerland has revised downward its prediction of world oil consumption in 1999 to 75.6 million barrels per day (mbpd), or 400,000 barrels less than it previously estimated. Additionally, supply is expected to be much higher. The North Sea alone will add an extra 600,000 barrels per day (bpd), Latin America adding 300,000 bpd and, of course, there is the additional supply from Kazakhstan, Russia. In the labor market, layoffs have risen to levels last seen in 1994 and according to those scheduled so far this year, 1998 could be the highest in the decade easily outstripping 1993, which saw 625,000. The only strength in employment is in services and government. Note that the manufacturing sector of the economy has seen 60,000 layoffs in October; and 59,000 in September. Remember that there are two service jobs for every manufacturing job and service sector employment is a lagging indicator. Just as manufacturing picked up almost a year earlier than services did in 1995, so too will services soon begin layoffs from the drop in other sectors eight months ago.

CURRENCY DEVALUATIONS: The Japanese yen will continue its downward trend to 175-200 to the dollar from 137. In 1985, when the Japanese economy was in an up-trend, the yen was at 200. Why should it not go back now that Japan is in a classic depression. The German Mark, now at 1.85 to the dollar is going to go to 2.50-2.85 when the EURO is introduced shortly. This is because the Mark is the strongest currency in Europe and the merging of the currencies will leads to its weakening.