Re: US/Russia Space Troubles

From: Fred J. McCall (fmccall_at_earthlink.net)
Date: 01/14/05 

Date: Fri, 14 Jan 2005 05:12:48 GMT

"Ed Kyle" <edkyle99@hotmail.com> wrote:

:Fred J. McCall wrote:
:> "Ed Kyle" <edkyle99@hotmail.com> wrote:
:>
:> :>Not shown. The overwhelming bulk of US government debt is held
:> :>domestically.
:> :
:> :But the percentage held by foreign interests is growing
:> :with the trade deficit.
:>
:> These two are not necessarily related.
:
:The governments of China and Japan, especially, have
:been buying dollars and Govt. bonds to keep the dollar
:from dropping in value. If they were not doing this,
:the dollar would be worth much less than it is, and U.S.
:goods would be much more competitive on the world
:market (and imports would be much more expensive). As
:the trade deficit has grown, their dollar-propping has
:also had to grow. The fear is that they eventually will
:be unable to prop fast enough, and the dollar will jump
:suddenly to its equilibrium point (a bad thing that
:could cause economic chaos).

I'll simply note that all governments do this sort of thing with
various currencies, from time to time.

:> :The problem is, in my view, that
:> :the status quo (now $2 billion trade deficit per day)
:> :cannot persist.
:>
:> So your problem is the current account deficit and not the budget
:> deficit?
:
:The current account is a bigger problem right now.
:
:> :Economists have been saying that we
:> :are nearing a break-point, perhaps this year.
:>
:> Cites? I'd like to know which economists are saying this.
:
:New Years Day Chicago Tribune Business Section.

Rather hard to check from here. What economists and which statements?

:> :The problem is that the U.S. Fed no longer has as much
:> :control of the U.S. economy as everyone thinks they do.
:> :The recent Fed stimulas didn't do as much for the U.S.
:> :as it did for China!
:>
:> Cite?
:
:Ibid.

Ibid. 

-- 
"It's always different.  It's always complex.  But at some point,
 somebody has to draw the line.  And that somebody is always me....
 I am the law."
                               -- Buffy, The Vampire Slayer

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