On 2/6/07, Doug Henwood <[EMAIL PROTECTED]> wrote:
On Feb 6, 2007, at 8:19 AM, Yoshie Furuhashi wrote:
>> > China, Japan, and the Gulf states pay for American consumption,
>> > keeping interest rates low.
>>
>> They're lending the US the money. You make it sound like they're
>> picking up the tab.
>
> "Lending" makes it sound like they are all intending to collect at a
> profit. :->
We're paying them interest, no? And the increasing flow of interest
payments shows up on the US current account.
In this case, the lenders don't appear to have the power over the
debtor to restructure the debtor's economy to prevent their paper
claims from becoming worth less and less. So, it looks to me that it
should be more accurately called "consumption subsidy," subsidizing US
consumption, some but not all of which consists of exports from the
lenders.
>> Housing has, for now, stabilized, so it's not that much of a drag
>> anymore.
>
> Vacant homes for sale, 2.1 million in the final months of 2006, "have
> climbed up to their highest level in four decades," bringing the
> national homeowner vacancy rate to "2.7%, up from 2.0% a year earlier"
> (Michael Corkery, "Vacant Homes for Sale Cloud Economic Hopes," WSJ, 5
> Feb 07, A1+).
Yeah, but most other housing indicators have gone flat or turned
slightly up.
The WSJ says that owners of vacant homes may be more willing or
pressured to sell by cutting prices than owner-occupants and that
speculators are less likely to purchase another home after selling
theirs than typical homeowners. So, the market probably hasn't hit
the bottom yet.
--
Yoshie
<http://montages.blogspot.com/>
<http://mrzine.org>
<http://monthlyreview.org/>
