" Japan, which has long been one of the chief U.S. bond buyers, has already been sharply cutting its purchases.
"A lot of Japanese invested in Enron's corporate bonds, which were supposed to be
very low risk," said Takeo Hoshi, a Japanese
economist who teaches at the University of California San Diego.
"After Enron collapsed, Japanese investors began reassessing the
risk of U.S. investments. And each scandal makes things look more risky."
Hoshi added that the Japanese are a bit amused by the current state of affairs. "Japanese
businesses have been bad for a decade, and they've been pressured to upgrade their
accounting to global standards, which means U.S. standards. But now they see that
U.S. standards aren't perfect either."
uniontrib.com
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Baldur, we heard on last week's evening news that investors were moving their money out of the United
States. And with the country in debt because of Bush's tax cuts to the wealthy, I wouldn't be surprised
if interest rates go up, and, because of our deficit, future social security payments will go down.
Concerns are widespread. Net foreign purchases of stock decreased nearly 60 percent in the past year, dropping from $41.7
billion in the first quarter of 2001 to $17.6 billion in the first quarter of 2002.
That outflow has contributed to the burgeoning current account deficit, which measures the flow of trade, stock and bond
purchases, direct investment and foreign aid between the United States and foreign countries. |
