U.S. Foreign Money Addiction Means Trouble

NEW YORK - It's an addiction. Every day, the United States sucks in more and more of it from abroad, just to keep the nation going. We speak, of course, about foreign money.

At our current rate of trade and budget deficits, foreigners need to purchase $2 billion in dollar-denominated assets each day just to keep the dollar stable, said Axel Merk, who manages $60 million at Merk Investments and runs the Merk Hard Currency Fund.

Over half the national debt is now financed by foreigners, according to Roger Ibbotson, chairman of the financial consulting firm Ibbotson Associates in Chicago and a professor at Yale School of Management. That's been true since 1980, but the difference now, he says, "is the scale of the game."

"I guess everyone wants to keep this game going," Ibbotson said. But if one of the countries we're most dependent on drops out, it could be "like a bank run."

David Wyss, chief economist at Standard & Poor's, is also concerned. "If this money stopped coming, the dollar would take a dive and U.S. bond yields would have to come up. That would constrain capital spending and housing and slow down the U.S. economy."

http://news.yahoo.com/s/ap/20051210/ap_on_bi_ge/wall___main

$95 billion in tax cuts for the top 1%.


The estimated population of the United States is 297,944,256
so each citizen's share of this debt is $27,307.08.

The National Debt has continued to increase an average of
$2.83 billion per day since September 30, 2005

discussion here:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x178655