Henry C.K. Liu
Doug Henwood wrote:
> Max B. Sawicky wrote, responding to Paula:
>
> >>>
> >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