Reply #18: Whoa, some interesting stats in there that I wasn't aware of. I knew it

[54anickel]

was bad, but not THIS bad.

snip>

To finance its current account deficit with the rest of the world, he said, America has to import $2.6 billion in cash. Every working day.

That is an amazing 80 percent of the entire world's net savings.

snip>

Twenty years ago the total debt of U.S. households was equal to half the size of the economy.

Today the figure is 85 percent.

Nearly half of new mortgage borrowing is at flexible interest rates, leaving borrowers much more vulnerable to rate hikes.

<end snip

Then they go on to say that Greenspin may allow inflation to wipe out half the debt in "real" terms, and how this will hurt the long-time lenders at fixed interest rates. Sheesh! That's the rest of the world that's been lending us $$$, the folks that have been buying repackaged mortgages from the GSEs (foreign banks again). Meanwhile NOTHING about how this will effect individuals! Higher unemployment, higher costs, still no "real" return to savers - if you want a "real" return on your money you'll again have to take on higher risk investing.

And you know, that's probably what Greenspin will do, assuming we don't crash. He and the rest of the monetarist were at odds with Volkers tactic of raising interest rates to smack down inflation. Can't do anything that might hurt the markets, ya know.