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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (16283)	11/19/2004 9:21:43 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 116555

19 Nov 2004 13:30 GMT Greenspan: US Current Acct Gap Doesn't Pre-Ordain Crisis By Joseph Rebello Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--U.S. Federal Reserve Chairman Alan Greenspan, playing down fears that have led to a steep drop in the value of the U.S. dollar recently, said Friday the nation's giant current-account deficit isn't yet so large that a currency crisis is inevitable. But, in a speech to European bankers, Greenspan said U.S. policymakers can't afford to be "complacent" about the growth of that deficit - the broadest measure of the nation's balance of trade and investment. Foreign investors, he said, may grow reluctant to buy U.S. dollars "well before" their investments in the U.S. become less profitable. "Although we have examples of the efficacy of flexibility in selected markets and evidence that, among developed countries, current-account deficits - even large ones - have been defused without significant consequences, we cannot be complacent," Greenspan said in remarks prepared for delivery to the European Banking Congress in Frankfurt. A copy of the remarks was released in Washington. Foreign investors' worries about the size of the U.S. current-account gap - which now stands at a record 5% of the nation's gross domestic product - have caused the dollar to slump against the European common currency. The euro has risen about 7% against the dollar since September, a movement the head of the European Central Bank has called "brutal." But U.S. policymakers haven't been alarmed. (MORE) Dow Jones Newswires November 19, 2004 08:30 ET (13:30 GMT)