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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: arun gera who wrote (87087)	9/29/2007 9:30:58 PM
From: Elroy Jetson	Respond to of 110194

Your post from the IMF is the truth rather than a "savings glut". America's Current Account deficit, being funded by loans from the Current Account surplus of nation's like China, is not indicative of a savings glut. But rather than call this situation a "new world order", I think calling it "vendor financing" more accurately describes the reality of what is occurring. If the loans didn't facilitate a nation's exports to America, I think their appetite for making these loans would be greatly reduced. Certainly the defective quality of the underlying collateral is further shutting down this new world order of vendor financing. As a result a Current Account deficit combined with a Capital Account deficit leads to a rapidly depreciating currency. .