der Euro/Dollar Long Thread

Grünschnabel warnt vor Defizit...hoffe er küsst jetzt den Euro nicht wach...*grr*


Greenspan Warns Anew on Trade Deficit
Monday November 14, 10:26 am ET

Greenspan Warns Anew on Trade Deficit, but Says Economy's Flexibility Should Temper Any Fallout


WASHINGTON (AP) -- Foreign investors will likely tire of bankrolling the bloated U.S. trade deficit but the economy's flexibility should help temper any fallout, Federal Reserve Chairman Alan Greenspan said Monday.

Greenspan's remarks delivered via video link to a conference in Mexico referred to the broadest measure of U.S. trade called the current account deficit, which swelled to a record $668 billion last year. The shortfall is financed mostly by foreign investors.

The huge current account deficits the U.S. has been running up each year "cannot persist indefinitely" Greenspan warned in prepared remarks. "At some point, investors will balk at further financing," he said. The Fed chief didn't say when this might occur.

This current account deficit is considered the best measure of a country's international economic standing because it tracks not only goods and services but investment flows between countries.

The current account deficit accounts for more than 6 percent of the total U.S. economic output as measured by gross domestic product.

Greenspan suggested that constraints on financing of the U.S. trade deficit are likely to come from "foreign investors' fears" of holding too large a share of their investment portfolios in U.S. stocks and bonds.