Reply #28: World imbalances: Economics, physics, philosophy?

[54anickel]

http://today.reuters.com/news/NewsArticle.aspx?type=reutersEdge&storyID=uri:2005-12-20T185305Z_01_FOR058652_RTRUKOC_0_US-ECONOMY-GLOBAL.xml&pageNumber=0&summit=

WASHINGTON (Reuters) - Don't hold your breath waiting for the stormy end feared for global economic imbalances in 2006, but don't lose sight of them either.

That is the ambiguous message from economists who, after three years of constant debate, are no closer to consensus on the threat posed by record U.S. international deficits and the counterbalancing stockpile of Asian foreign currency reserves.

This year only muddied the water for many.

A year ago, most agreed that further dollar weakness was a likely result of a U.S. current account shortfall closing in on $800 billion -- or more than 6 percent of national output.

With the United States needing to attract nearly $3 billion of new net foreign investment every working day just to balance its books, they reckoned a lower dollar would be needed keep U.S. assets cheap enough to be tempting.

But currency markets contrived to ignore the script.

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:hi: Gotta run some errands before heading out to make a couple of bucks for the day. Have a great day watchin - Santa Rally or early January White Sale?