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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (14877)	12/27/2001 6:56:10 PM
From: Hawkmoon	Read Replies (3) \| Respond to of 281500

What happens if all those foreign institutions sell all their USA held stocks to generate funds to service their domestic problems I doubt it. You see, the LAST THING Japan and Europe want right now is a weak USD. The weaker the dollar becomes, the less they are able to use that favorable currency exchange to subsidize their lagging economies and bloated governmental programs. No, the USD will remain strong, but that does not mean that corporate profits will prosper (except those which rely upon cheap imported components to produce higher value items). The US has FAR MORE latitude with regard to economic policy than do other major economies, saddled with their massive entitlement programs and unfunded liabilities (which far exceed those of the US). Despite all the grumbling about trillions in US National Debt, the public debt only amounts to approx 37% of our $10 Trillion annual GDP. Japan's currently is 140% of their annual GDP. And I believe that Argentin is in a similar situation. And what's even more bizarre, is that the Japanes government is discussing raising taxes in order to finance the debt, which will only stifle economic growth further, as well as possessing a greater burden upon the already struggling Japanese taxpayer. I welcome more activity over on the "Currencies and Global Capital Markets" thread. We've had some VERY fascinating discussions there.. That is, if you enjoy FOREX analysis. Btw, I definitely feel the issue is "on-topic" since economic relations forever lie at the heart of Foreign Relations. But I won't too many of my macro-economic ramblings upon the good folks of the FADG.. :0) Hawk