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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (160868)	4/23/2005 7:50:58 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 281500

Although it is to be expected that other countries put their own economic interests first, there is a diference between doing this in a co operative manner (agreements on trade, currencies etc and with policies which conform and honor those agreements etc) I don't see many countries co-operating with us regarding increasing access to their markets for US goods, or better yet, increasing their economic environment to the point where their own people are willing to consume products, (US or otherwise). Let's face some facts here. The US economy, along with that terrific trade deficit, has been supporting a large percentage of growth in the rest of the world. It's to be expected when US GDP equates to some 30% of the global economy. As for savings rates, while our cash savings are low vis-a-vis the rest of the world, we also have the largest stock market in the world, which cannot be ommitted from overall savings. Thus, while other countries might have higher savings rates, can they also claim to have higher investor rates? This change in savings vehicles primarily occurred as a result of the influx of IRAs, Mutual Funds, and Money Markets. We also cannot discount the real estate markets, which has been particular active (and accretive) to household savings due to soaring valuations. Americans save.. we just save in different ways that aren't as easily tallied as cash savings in bank accounts. Furthermore, using Japan as an example, they literally are overflowing with savings. So much depositor money in banks that the effective lending rates are sub-1%. But Japanese corporations are, in general, STILL twice as leveraged as US corporations and are thus, unwilling to borrow more money (increase debt). Thus, savings is having LITTLE TO NO EFFECT on economic growth in Japan. In fact, were the US economy to contract into recession, the greatest impact would fall upon those economies dependent upon exporting to US markets. In sum, when the US sneezes, the other exporting countries catch a cold (or sometimes pneumonia). Essentially, cash savings in these countries is a blatant statement that this capital lacks a more lucrative investment vehicle paying greater returns. But that said, when US consumer liquidity is hamper by steep declines in wealth, whether stock, bonds, or real estate, it can exacerbate their ability to pay off debt. And given that the US job growth has been tremendous over the past year or two, with near record low unemployment rates, consumer confidence is likely to remain stable. But watch the consumer confidence in Europe and Japan.. It has been slacking off (along with profits) as the Euro has risen. Most Europeans, as I understand it, lack IRAs, Mutual Funds, 401Ks, and Thrift Savings Plans (TSPs), where their money is invested in something other than cash accounts. Hawk