To: Skywatcher who wrote (16670 ) 7/18/2004 7:22:32 PM From: glenn_a Read Replies (2) | Respond to Chris - re: the Flanigan article ...That sounds like the plot of a summer horror movie. And like all scary flicks, it's an exaggeration and distortion, with misleading words like "borrowed" littering the script "... it's important to remember that the main reason for the $500-billion trade deficit and much of the US debt is that the US economy is the engine of the world. It pulls developing countries into the modern economy by buying their imports and investing in their new industries. The U.S. started on this path in the aftermath of World War II, when it practically single-handedly financed Japan's economic recovery by purchasing its goods, and it has generally served this country well. pulled into the modern economy " is now vendor financing the U.S. Consumption Engine. Yes can't imagine why that would be a cause for concern about the U.S. economy or $. In fact, isn't this the very REASON that the U.S. is "running large budget deficits and huge trade deficits "? Hmmm, sounds like a pretty darned scary movie to me.Remember something else: The government banks of China and Japan alone hold more that $700 billion of U.S. Treasury bonds and aren't interested in dumping them. Why? Because that would drive down the value of the U.S. dollar, and a strong dollar is key to their ability to export to U.S. consumers and industry "Patterson says ... this can easily lead to a run on the dollar. Such runs have occurred, he notes, in four separate two-year periods in the last three decades. ""Fears are to be expected amid the rapid globalization of the U.S. economy in an interdependent world. But we should leave the horror stories to the movies. "
