Posted by A dismal science... on May 15, 2003 at 12:02:43:
In Reply to: Re: Re: Re: Re: Re: Re: Re: From Today's NYTimes posted by Bill on May 15, 2003 at 11:07:36:
What's more troubling is the capital flight from US-based investments to Far East areas. The handling of the diplomatic issues surrounding the Iraq conflict didn't help us much--those European "surrender-monkeys" hold much of our national debt. Lately, the move has been toward selling off dollars, with the rise of other currencies like the Euro and the Australian dollar. Increasing the deficit doesn't help to bolster confidence in the US economy as viewed from offshore.
Not that I think that the Euro is anyone's salvation. The powerhouses of the Euro--Germany and France are in near-stagnation economically. The UK has once again decided against joining the common-currency community, probably for very good reasons.
Compounded with this is the fear that we may find ourselves in a deflationary episode if things don't pick up pretty soon. The last major one we had was the Great Depression; Japan's been in one for the last decade.
Underlying all of this is the energy issue--natural gas may be the sleeping dog that may rear its ugly head again this winter. (Remember 2000 when the wellhead prices jumped 400%?).
We live in interesting times.