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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: UncleBigs who wrote (71215)10/6/2006 3:56:45 PM
From: GST  Read Replies (1) of 110194
 
<True. This is because consumers are temporarily living above their means. Once consumers are forced to live within their means, the current account deficit will decline. How is that inflationary?>

Sorry -- that is baloney. There is no evidence that our impending poverty will lead to a lower current account deficit. Imports are cheaper for the most part than domestic production -- we will likely buy more, not less. And the current account deficit includes the cost of servicing foreign debt -- and that will soar as the economy slow.
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