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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (10926)	12/31/2002 8:51:34 PM
From: Jim Willie CB	Respond to of 89467

as US imports less, foreign economies will suffer worse that is my premise, with a backdrop of US not exporting much we purchase foreign oil, TV's, cars, clothes, ceramics, electronic components sure, we will purchase less as consumers get in touch with the reality of their own financial demise but foreign economies are not a constant, TipMan their exporters will suffer mightily their banks will suffer on reserves valuation, which carries with it huge consequences on ability to issue loans some definitions: trade gap is the difference between our sales to foreigners and purchases from foreigners of goods & services investment gap is the difference between our capital investments abroad and their investments inside the USA e.g. British buying TBonds, Venezuelans buying Florida property, Chinese buying a large interest in Intel add the trade gap to the investment gap and you get the current account deficit by the way, the investment gap is widening faster than the trade gap this is the piece that consistently eludes the press/media they dont examine the financial market changes to a declining dollar the result is that foreigners pick up and go home this occurred in spades during May-June as the dollar dropped and the stock market rapidly lost 1200 pts on Dow I expect the US consumers to hunker down some but even bankrupted households will continue to spend it is the American way!!! BK laws enable people to keep much more of their assets than ever before they will continue to spend they will find new money to spend that they dont have e.g. parent's money in 1970's, wives went to work, as the cost of living began to strain the typical household in the 1980's and 1990's two incomes was not enough to cover expenses of course, expenses for all those things that were considered "necessary" were actually full of frivolous crapp for almost 15 years now, Americans have gone into hock just getting by the USGovt will gaurantee that spending levels continue if Monetization efforts accelerate, the objective will be to provide a steady foundation for continued spending thru support of mortgage rates, stock prices, etc if Govt stimulus efforts accelerate, the objective will be to provide a steady foundation for continued spending thru tax cuts, extended unemployment benefits, etc the end result is that spending will continue on imported items never underestimate the capability of Americans to spend all their money, and a great deal of other people's money after that retrenchment will be extreeeeemely stubborn by the time it really happens later in 2003 or early in 2004, the rest of the world will have entered serious recessions since their printing presses and govt policies will not be anywhere near as liberal as ours the trade gap will narrow somewhat but the investment gap will worsen the current account deficit will narrow slightly, then simply not respond to the declining dollar I respectfully believe the flaw in your argument is expecting foreign individuals and corporations to be active in purchasing much of anything they will go into deep recession first, long before USA GET READY FOR A USDOLLAR DECLINE VICIOUS CIRCLE / jim