...I'm okay with being REALITY-based.




Tuesday, January 25, 2005
      ( 8:23 AM )
 
Bye, Bye, Money

It's not all that comforting that China now owns a large percentage of the U.S.

In 2003, the most recent year with full international statistics, central banks financed 83 per cent of the US current account deficit, with Asian central banks accounting for 86 per cent of flows.

A similar picture is emerging for 2004. Despite a good start to the year, when the private sector was a large net purchaser of dollar assets, central banks came to the rescue again. The People's Bank of China has let it be known that China increased dollar reserves by $207bn (€159bn) in 2004, financing nearly a third of the US current account deficit, estimated at $650bn.

I wonder if all those "values-motivated" voters care that their votes actually further endangered our country's ability to defend itself. Banks and markets across the world are deciding that maybe good ol' "Freedom on the March" America might not be the best the place to invest.

Central banks are shifting reserves away from the US and towards the eurozone in a move that looks set to deepen the Bush administration's difficulties in financing its ballooning current account deficit.

In actions likely to undermine the dollar's value on currency markets, 70 per cent of central bank reserve managers said they had increased their exposure to the euro over the past two years. The majority thought eurozone money and debt markets were as attractive a destination for investment as the US.

But don't worry, all this boo-hoo news about central banks disinvesting in the dollar and China holding most of our debt - we're gonna go into MORE debt!! Talk about political capital - it must be what takes the place of actual capital.

The Congressional Budget Office is predicting the government will accumulate another $855 billion in deficits over the next decade, excluding the costs of President Bush's Social Security plan and ongoing wars in Iraq and Afghanistan.

The report, described by a congressional aide who spoke on condition of anonymity, was being released Tuesday, the same day administration officials were expected to describe President Bush's request for fresh $80 billion request to pay for military operations in Iraq and Afghanistan this year.

The deficit projections for the years 2006 through 2015 is almost two-thirds smaller than what congressional budget analysts predicted last fall, but the drop is largely due to estimating quirks that required it to exclude future Iran and Afghanistan war costs. Last September, their 10-year deficit estimate was $2.3 trillion.

...wait, what was that?

...due to estimating quirks that required it to exclude future Iran and Afghanistan war costs.

Typo? Freudian slip? Preview? The sad thing is that even if it were true, who would care? Have you heard any news outlet discuss the financial turmoil we've gotten ourselves into? Does any news show mention that Americans are in the most bankruptcy and debt they've ever been in, and yet the adminitration expects to further impact the natioanl deficit by letting these people have control over their own retirement funds? Does it matter to anyone that if China and Japan were to cash in and go for euros, we'd be plunged in the largest depression in history? Oh, I forgot, there was a big snowstorm.

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