Put yourself in their place...
Via Drudge, Russia is considering Euro- rather than dollar-denominated crude oil production. We heard similar scare stories about OPEC many months ago, before Iraq was liberated.
Now consider this very simple table, posted by us way back on June 24 (in connection with the Boskin "antibonds" story):
------------------------------------------------------------------------------------------
GOVERNMENT DEBT AND PENSION LIABILITIES AS PERCENT OF GDP (1990)
===net conventional debt=======net pension liabilities
CANADA===52================121
GERMANY==22================157
ITALY====100================259
UK=======27================156
US=======35= ===============90
-----------------------------------------------------------------------------------------------
Source: Essays on Pension Reform, Max Alier PhD Thesis, University of California LA, 1997; quoted in R.E.A. Farmer, Macroeconomics, South-Western, 2002, p. 162.
OK now you tell me, which major trading bloc's currency do you think is least likely to undergo chronic deterioration in value over the next fifty years? Put yourself in Russia's position. What would you do?
Don't want to say I told you so, but...
From today's CBO announcement:
The federal government incurred a total budget deficit of about $374 billion for fiscal year 2003, CBO estimates, more than twice the deficit recorded in 2002, although less than both CBO and the Office of Management and Budget projected this summer. In dollar terms, that shortfall represents the largest deficit in U.S. history -- well above the $290 billion deficit of 1992. However, at about 3.5 percent of gross domestic product (GDP), it would still be smaller than the deficits of the mid-1980s and early 1990s relative to the size of the economy. (Emphasis added)
From The July Fairmodel US Model Forecast Memo:
The federal government is now running a large budget deficit, and the model is predicting that the deficit will continue to be large throughout the forecast period (see the predicted values for SGP). By the end of 2004 the deficit is about $400 billion (remember this is the deficit as measured in the NIPA accounts). This $400 billion is smaller than the federal government is projecting the deficit to be, and so the model is more optimistic about the government's budget than is the government. (Emphasis added)
Link posted by Steve Antler : 6:09 PM |
