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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Henry Volquardsen who wrote (1798)	6/16/1999 4:10:00 PM
From: Freedom Fighter	Read Replies (2) of 3536

Henry, >>I don't think the foreign inflows can fuel the credit expansion since those inflows have to be offset by the current account deficit and net US investment abroad. The balance of payments is more of a closed system. What it does effect is the price of various assets such as debt.<< Agreed on the price of the assets. I wonder about the savings portion. I am still tossing it around because I have heard economists talk about it as savings and not. If I buy a Honda, and Honda takes the dollars and buys a new U.S. bond. That's 'x' amount of credit funded from external savings in dollar form instead of from let's say my savings. The amount of demand for USD over and above the current account deficit is offset. Are we in agreement? Wayne

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