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To: Lizzie Tudor who wrote (152078)	1/27/2003 7:39:07 PM
From: GST	Read Replies (1) \| Respond to of 164684

Nobody cherishes the idea of the US economy going into the toilet. But people have to be realistic about the position the US has gotten itself into -- and there ARE economic issues that receive little attention, like the current account deficit and the looming government deficit. If the US deficit was being financed by Americans it would not be much of an issue (and remember that the current account deficit MUST be offset by capital inflows or a declining dollar). When Uncle Sam needs to turn to foreign investors to lend us money in the hundreds of billions year after year, you must understand that we become exposed to international financial vulnerabilities. We are the world's premier debtor nation. If we cannot finance these deficits with US savings and capital inflows then the dollar goes down. And as the dollar goes down there is an incentive to sell the dollar -- and so on.