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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: willcousa who wrote (10262)	6/8/2004 10:25:38 AM
From: Robert Douglas	Read Replies (1) \| Respond to of 25522

Something has nagged at me for over 50 years. Congratulations on your golden wedding anniversary! <g>

To: willcousa who wrote (10262)	6/8/2004 10:56:53 AM
From: Cary Salsberg	Read Replies (1) \| Respond to of 25522

RE: "...deficits and negative trade balances..." Deficits require debt and negative trade balances put money in the hands of foreigners who have little use for our currency other than to buy our very secure, relatively high yielding debt. Some invest in our assets, too. Both debt and negative trade balances weaken our economy over time, but other factors have strengthened it much more. I think that the negative effects will increase as world economic competition increases. Negative trade hits our labor markets and debt limits our ability to help with labor benefits and training.

To: willcousa who wrote (10262)	6/8/2004 11:20:03 AM
From: Bookdon	Read Replies (2) \| Respond to of 25522

Deficits should really only be measured in terms of percent of GNP (or similar "worth-growth" number), rather than in absolute terms. If the deficit is small in terms of GNP, then it is not too dangerous. Theoretically, it is OK to have a deficit in "down" years to stimulate the economy, and then pay it back through surpluses when the economy has "up" years. Unfortunately, politicians seem to hate to ever cut program costs, so they tend to stay in place, even in "up" years (during the Clinton years, the political climate allowed surpluses because of a critical conservative opposition in congress). The real crunch comes with accumulating debt over a number of years, such that the debt-service becomes a large percentage of the budget. Then, any up-tick in interest rates can cause a double-whammy (hitting both the economy and the debt-service portion of the budget). The trade deficit is quite different, and should take care of itself. If foreigners are willing to sell more goods than they buy, then the value of the dollar should reflect that (going down when there is a deficit, up when there is a surplus). If foreigners are willing to "support" the dollar by accepting a currency exchange rate that does not reflect the balance of trade, fine. Eventually, however, the "correct" value will assert itself, and foreign goods (and things like European vacations) will cost too many dollars, and Americans will have no choice other then spending money at home.