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Pastimes : A Jackass, his PAL(indrome), and GOLD
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To: yard_man who wrote (282)1/20/2003 1:59:41 PM
From: mishedlo  Read Replies (2) of 1210
 
Seems to me, our cutting back on imports, will swamp deterioration of exports. Again, why do you believe the opposite -- that foreign consumption will fall as fast or faster than US consumption??

Where do you think they will get money to buy our stuff with?

US$ they receive when selling us stuff, perhaps!
Hmm they might not have much $ to buy our stuff (not that they would anyway) if we dont buy their stuff.

So while the "gap" in total $ might get smaller,
the "gap" in % terms (relative to total trade levels) might not. As overall trade goes into the toilet the world sinks into a recession perhaps.

Tippet I am guessing at some of this stuff, but I do not think there is any easy way out, as you seem to be suggesting. China is growing (but not buying our stuff and that is not likely to change regardless of how far the $ falls). The rest of the world has problems and is likely headed into a recession if we stop buying their stuff.

This could and should get rather ugly.
Greenspan thought he could keep consumers spending until the business cycle turned around but he failed IMO, and failed BIG BIG time.

Greenspan failed to account for the simplest of measures. Consumer spending is 2/3 of the economy, and that sector was over stimulated with loose $ and still it did nothing to raise corporate profits because of delationary pressures from China.

Now we are supposed to be coming out of a recession with shrinking corporate profits, and consumers with zero pent up demand. What about this picture do the economists not see? It is crystal clear so they must have their heads where the sun doesnt shine.

M
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