the global melodrama

[James Devine]

Doug writes: >... What seemed initially like a local financial problem in a
few Southeast Asian countries has spread, with the U.S. about the only
corner of the world that's been spared, so far. Indeed, U.S. markets are
rallying on the old flight to quality reflex, though I'm a little mystified
why a $1.8 trillion debtor is considered a safe haven. Countries with big
current account deficits, big foreign debts, bloated financial markets, and

 overvalued currencies are usually considered targets for speculators, not
refuges. But truly this is a new era.<

perhaps the rising U.S. debt is a _result_ of the flight to quality?


>... So I'm wondering if the world's central bankers really *want* this
deflation to run its course.<

they did in 1930.

Jim Devine jdevine at popmail.lmu.edu &
http://clawww.lmu.edu/Departments/ECON/jdevine.html