Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (1798)	6/16/1999 4:00:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 3536

Henry, >>Also the savings rate in the US is not negative. Those stats are notoriously inaccurate. << I am aware of the savings rate quirk related to capital gains taxes but I think in some ways it is brings false optimism to the table. The increased capital gains tax paid increases the tax receipts to government (federal, most state, and some local) and thereby reduces their credit demands by an amount equal to the reduction in the personal savings number. No bull market = lower capital gains taxes = higher savings = budget deficit. And the capital gains should not count as income (IMHO) because the proceeds from the sale to me are offset by someone else's purchase of the shares so no new money is available for lending. Wayne

To: Henry Volquardsen who wrote (1798)	6/16/1999 4:10:00 PM
From: Freedom Fighter	Read Replies (2) \| Respond to of 3536

Henry, >>I don't think the foreign inflows can fuel the credit expansion since those inflows have to be offset by the current account deficit and net US investment abroad. The balance of payments is more of a closed system. What it does effect is the price of various assets such as debt.<< Agreed on the price of the assets. I wonder about the savings portion. I am still tossing it around because I have heard economists talk about it as savings and not. If I buy a Honda, and Honda takes the dollars and buys a new U.S. bond. That's 'x' amount of credit funded from external savings in dollar form instead of from let's say my savings. The amount of demand for USD over and above the current account deficit is offset. Are we in agreement? Wayne