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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Mark Adams who wrote (1880)11/6/2003 8:08:14 AM
From: Wade  Read Replies (1) of 110194
 
Mark,

You ask me? I am only a nameless little citizen without economy 101 education. What do I know? But, I do know that the trade deficit sink hole is getting way too big. May be he wants to take his words back right now. <G>

But, I do strongly feel Fed's job is to help the president and senate to run the money supply system. It is our government's responsibility to reduce the trade imbalance. I don't think he should make such speech at all. I doubt it was in his job description. He used the disclaimer words "The views expressed are mine and do not necessarily reflect official positions of the Federal Reserve System." He forgot that the reason he was invited to the luncheon was that he was the President of Fed. Res. Bank of St. Louise. Even though it was his personal views but the speech implied that was Fed's view as well. But, I don't remember Fed ever published their view. Do you?

He also said:
A common interpretation of the current account is that an increasing current account deficit is bad. One reason for such an interpretation is psychological -- we tend to view deficits as bad and surpluses as good. Thus, it is understandable that our initial instinct is to view an increasing deficit as bad. The possible error of this view is obvious: If the current account deficit is bad, so also is the capital and financial account surplus."

I am trying to figure out why the foreigners want to have account surplus if this is a bad idea. They must be crazy and suicidal!! LOL

What do you think?

Wade
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