>It does seem a remarkable statement, but can Doug or anyone else translate it?
McDonough:
>But should a different international monetary system ultimately emerge in
>which other currencies, such as the euro, play an increasingly important
>role alongside the dollar, there would be benefits for the United States as
>well. Such a development would, for example, impose greater market-led
>discipline on the United States and, in the process, help us address our
>chronic low-savings problem.
If the euro becomes a major international currency, the competition for investments would make it harder for the U.S. to attract funds at a given interest rate. The U.S. would have to adjust to lower borrowing or pay a higher interest rate to keep capital coming in.
>3. There are disadvantages to the USA's low savings ratio. But what
>can they be??
Debts. Big foreign debts, and the need for $1b a day to finance the c/a deficit.
Doug