United States: Deficits, the other sideThe conversations about the United States economy always carries a feeling of impending doom. This despite an economy which today generates US 50,000 per capita GDP. United States is an unbelievably rich country with net worth of about US 60 trillion and annual GDP of US 14 trillion +.Yet the conversation is always about lack of savings, deficits and on and on...but to view something completely different here is an excerpted section from the BEA: on the United States business with the rest of the world (ROW) including payments on US Bonds.($ billions) Income from ROWPayments to ROWNet 2001 322.4 278.843.62002 305.7 275.030.72003 336.8 280.056.82004 437.5 361.476.12005 573.5 480.593.02006 725.4 647.178.32007 861.7 759.3102.4USA has a Net international investment position of $2.4 trillion...made up of $20 trillion of foreign investment in the US and $17.6 trillion of US investments in the Rest of the World.On this negative $2.4 trillion, US managed to earn $102 billion in 2007....nice performance.ROW earned 3.8% from US investments and US earned 4.9% on its investments in ROW!Ronald Reagan created massive deficits in the early 80's in his historic challenge to the Soviet Union.The crumbling of the Berlin wall and the resultant 'peace dividend' allowed Bill Clinton to drastically cut military spending and laid the foundation of huge budget surpluses.George Bush has reversed Clinton's military cuts and posed a historic challenge to militant Islam...should this policy and resolve prove successful, expect a peace dividend that wipes out any sign of deficits in the United States.While I am not a fan of US foreign policy, I have never questioned their resolve once they have charted and embarked on a course.I fully expect a backlash on all those countries which have benefited from US largesse, and now question its 'capability and position in the world'.Get ready for the Chinese economy to get crushed and the reemer gence of Japan.Japan thought they won the peace with the United States...the lost decade and withering in the wilderness have been a tough lesson.It seems others are making the same mistake...Live and Learn.Lee's DhabaThe content on this mail is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment de cisions.
--~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
