Replies to post #157913 on Zeev's Turnips Patch-No Politics (ZEEV)

[SantaCruz]

if foreign investors decide to stop buying our paper (or even just reduce purchases)

But why would they do that? They would risk sending the US into a recession which would dampen their export business which might send them into a recession. Right?

[Zeev Hed]

Well, George, in 1991 or so one book, the "13 trillion dollar deficit" scared the hell out of all potential investor, and they finally to get on the bandwagon in 99/00 just to be bag holder. Without putting a time stamp on when these risks are likely to materialize, this is a lot of talk about risk. Sure these risks are there (I have been pointing to these risks for the last three years myself), but now that we know about these risks, we are not going to step aside and let another good bull move go by. When the market will give some signs that the euphoria is getting too rich, I am sure many here will simply step aside and let the decline pass by. I don't think that the risks pointed are "imminent" the next few month. Politicians are simply adept at pushing out the day of reckoning to a time that is best for their political survival (first year of a President's term is best...).

[limtex]

GC- There have beeb people going on about this for over twenty years. They have been uniformly totally disproved. Their views are simply not related to real wolrd economics.
The $ is the World currency thats the way it has been, thats the way it is.

If there were to be a radical readjustment in the exchange rates the US would not be the main sufferer and the rest of the World knows it.

It is clear that there are fundamental structural changes going on. Europe has lost its economic raison d'etre and will have to get used to a much reduced standard of living and prospects.

India and China are going to have increasing prospects and prosperity for the next fifty years or more. The US is the driver and benefits either way.

L