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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (24446)	10/23/2002 1:33:52 AM
From: smolejv@gmx.net	Read Replies (2) \| Respond to of 74559

>> <Why does the buying power of the dollar continue to increase? > Because people keep borrowing it. << ...and the world is ready to feed the cuckoo quoting Stephen Roach in morganstanley.com >>... United States borrowed freely from abroad to fund the excesses of domestic consumption. Courtesy of ever-widening current-account deficits, America went from being the world’s largest creditor to the world’s largest debtor; during its bubble, the US net foreign asset position went from -2% of GDP in 1994 to a record -20% of GDP in 2000. The bubble enticed America to live well beyond its means, as those means are defined by domestic production and income generation. Lacking any autonomous demand growth of its own, the rest of the world has been more than delighted to go along for the ride -- at least until now. But unlike Japan, which was able to finance its bubble economy on its own, the bubble-induced excesses of a saving-short US economy have largely been financed through the "kindness of strangers"<<