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

To: neolib who wrote (160951)	4/28/2005 3:01:34 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 281500

We soak up about 80% of the world's savings to finance all those inflating assets as well as consumables we find desirable. So what would have us do? Stop selling our debt to them? The fact that interest rates are still under 5% indicates to me that their is a more than sufficient market for that debt, especially when JGB's in Japan don't even pay 1%. So far, the rest of the world has been willing to take our IOU's because the interest and security are considered a good value. The fact that they stay employed while doing so is an additional barrier to wiping the rose tint from their glasses. But the future can change all that... The future certainly can. Look at Japan's recent bad news. Economic performance is declining once again, and deflation continues. That means the asset values underlying their commerical and personal debt are dimishing again, and hurting their balance sheets. Can you imagine what would happen if Americans stopped buying Japanese goods? There's a real problem with many of the other world economies. If they were doing so much better than us, they would be keeping more of their money at home, where they perceived it as a better investment return. But they're are not. They know that non-accountable governments are notorious seizing assets, or just plainly destroying the value of them with ruinous economic policies. Hawk