http://www.nytimes.com/2003/11/20/business/20CND-TRAD.htmlThe general focus is not surprising - Greenspan thinks free trade shouldn't be impinged no matter how many people lose their jobs, because the only people he's ever given a rat's ass about is the investor class.
But the alarming thing is the last few paragraphs:
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"In the end, it will likely be the reluctance of foreign country residents to accumulate additional debt and equity claims against the United States," Greenspan said.
Some of that may already be happening. On Tuesday the Treasury reported that net foreign purchases of American securities fell to just $4.19 billion in September, from $49.9 billion in August.
The decline in the value of the dollar so far this year and signs of a revival in growth elsewhere in the world may be encouraging foreigners to either repatriate capital or invest it elsewhere.
If that trend continues, it poses grave risks for the United States, Mr. Hormats of Goldman Sachs said, because of the government's yawning budget deficit.
"We still have a huge savings deficit, so we will continue to need that foreign capital," he said. "If we don't get that capital, then we will be forced to raise interest rates to attract it."
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What's really kept the economy growing all these years while we built up a huge trade deficit is the influx of foreign capital - it offset the money that was flowing out of the country to buy foreign goods. Look at that drop in one month - 44 billion dollars. Whoa! And now that we have this huge deficit, we have to finance it (partly) with foreign money - which means we have to raise interest rates to attract it, which bitch-slaps the rest of the economy.
And this all comes back to that little fucking chimp-boy moron and his tax cut, and his budget deficit!