>>>
>Ah-ha. I thought that inflation news was a fake-out. Today when I heard a
>bit of Greenspanese on NPR, the words just keep echoing: Yea. And Labor's
>gettin' uppity.
>>>
>
>Greenspan is the one who's uppity. Even after the latest
>report of no inflation he is still signalling a rate increase.
He may have something else on his mind. Here's what he said in a speech in Chicago on May 6:
"A more distant concern, but one that cannot be readily dismissed, is the very condition that has enabled the surge in American household and business demands to help sustain global stability: our rising trade and current account deficits. There is a limit to how long and how far deficits can be sustained, since current account deficits add to net foreign claims on the United States.
It is very difficult to judge at what point debt service costs become unduly burdensome and can no longer be sustained. There is no evidence at this point that markets are disinclined to readily finance our foreign net imbalance. But the arithmetic of foreign debt accumulation and compounding interest costs does indicate somewhere in the future that, unless reversed, our growing international imbalances are apt to create significant problems for our economy."
Doug