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To: JohnG who wrote (144474)	8/24/2006 10:51:18 AM
From: Clarksterh	Read Replies (2) \| Respond to of 152472

Clarksterh -- We are running a 600-800 billion per year negative trade balance. China, Europe and Japan have been kind enough to lone this back to the US so far by purchasing US gvt securities and by private investment. There is, however a time horizon on this. The whole ponzie scheme will blow up sooner or later unless this is brought under controll. Trading dollar credits for merchandise is good for the US as long as it lasts. However, it cannot last too much longer. It seems to ne that eliminating all purchases of foreign oil (excepting Canada & Mexico) will go a long way to stem the free blrrd we now have. The problem is this is a little like the approach that Nixon took to inflation in the early 70's. Price Controls didn't fix the underlying problem - just put a piece of Duct Tape over the hole in the dam. Forcing a 'buy American' approach won't force us to save more, which is what we really need to do.

To: JohnG who wrote (144474)	8/24/2006 12:30:00 PM
From: peterk	Respond to of 152472

JohnG- Regarding the 600-800bn trade deficit you forget to mention the current account surplus we have. In addition if China, europe, Japan were to dump their treasuries someone would have to be willing to purchase them. At higher interest rates our treasuries would once again become attractive driving our dollar higher and stifling exports which we being the largest exporter in the world would quickly send our economy in a tailspin with the rest of the world following. I don't believe China, Europe, Japan, are ready to kill the chicken that lays their golden eggs.