Says Bernanke:
"Why is the United States, with the world's largest economy, borrowing heavily on international capital markets--rather than lending, as would seem more natural? What implications do the U.S. current account deficit and our consequent reliance on foreign credit have for economic performance in the United States and in our trading partners? What policies, if any, should be used to address this situation? In my remarks today I will offer some tentative answers to these questions."
Concludes Bernanke:
"The various factors underlying the U.S. current account deficit--both domestic and international--are likely to unwind only gradually, however. Thus, we probably have little choice except to be patient as we work to create the conditions in which a greater share of global saving can be redirected away from the United States and toward the rest of the world--particularly the developing nations."
IN OTHER WORDS WE HAVE TO CONVINCE FOREIGNERS TO QUIT SENDING US THEIR MONEY.....!
WELL, IF THE DEFICITS INCREASE ANYMORE.....THAT MAY INDEED HAPPEN!
And that's really what everyone is afraid of......
Hmmm....has Bernanke taken a lemon and made lemonade.....? Is this really economics or just wishful thinking...?
