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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (67183)	8/9/2005 4:10:07 PM
From: energyplay	Read Replies (1) \| Respond to of 74559

"But you raise an interesting point on corporate saving in overseas locations. Of course if that income is earned overseas it is part of some foreign country's GDP not US GDP but if the profit was repatriated it would be part of US GNP (I'm not sure if it is counted in US GNP even if it remains in the foreign subsidiary). Now a question I have wondered is if those foreign subsidiaries buy US assets with those savings, that is counted as foreign investment into the US? This gets pretty confusing :)" If the foreign sub LOANS money to the US parent or another sub, then it's part of all the capital inflow which corrects the US trade balance.... A trade balance which was partially caused by 'adjusting' transfer prices (for intermediate goods, sub assemblies, etc.) between corporate subs to move income from high tax areas to low tax areas. **** So capital gains in stock - say Google - will show up in national accounts, but not as personal income, and thus not as personal savings ? Now if we make an index of housing affordability based on 'personal income', then places like Silicon Valley will appear unaffordable - but the various Google kids have no problem buying in Atherton... This is why I won't hold my breath waiting for housing and the US Dollar to fall.