> Sam wrote: > Ummm it's not an illusion it's real. Saying the economy will collapse > in the future because of the deficit is putting to much trust into > your crystal ball. >
That's true, but so is Paul's point - America's growth is now funded by the largest debt in history. Basically China is lending us money to buy their products (see trade deficit). Using an analogy, it'd be like taking out more and more home equity loans - if you invest the money you might be fine if the investments pay out more than the loan interest. BUT - if you spend it on crap and you don't get that raise you were expecting, you could go bankrupt. Well, Mr. Bush has decided to spend it on crap. That doesn't mean we'll collapse, it just means the odds of pain are higher than if we invested those funds or if declined to borrow the money in the first place. Again, this is why he's a fiscal liberal. A conservative would want to maximize financial security and so would not take incalculable risks. For me, the truth is that we're in uncharted waters - there's no history to back up anything. For example, normally an inverted yield curve is a signal for recession, but in today's case I don't think that's going to happen unless oil prices shoot up again. Prediction: The new fed chairman will lower interest rates triggering a big 2006 chock full of consolidations and mergers. However - there's a lot of people on the edge. If oil prices spike again you could see a lot a pain. Personally, I've a health hedge against the dollar that's sitting in Asia and I'm considering the Euro again. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Find out how to get a fax number that sends and receives faxes using your current email address http://www.houseoffusion.com/banners/view.cfm?bannerid=64 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:185794 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
