From: Lee Corbin (lcorbin@tsoft.com)
Date: Sat Aug 09 2003 - 20:57:45 MDT
Ron writes
> [Lee wrote]
> > You are starting to scare me. What capital flight from the United
> > States? Is it major? Or is it just a trend that worries you?
> > Do you have any references?
>
> As the situation is at least debatable I prefer to give you my one
> best reference and let you come to your own conclusions. You will
> find an excellent article or article in the following site.
> http://www.mises.org/articles.asp
Okay, thanks. I will check it out.
> However, yes, I am dead serious about the flow of international capital
> in and out of the US. As an example it has been said that it is the foreign
> purchase of our government bonds that finances our deficit spending. Dire
> predictions have been made about what would happen if those foreigners cashing in
> those bonds as they came due and taking their money home.
I used to worry about that too. And then my economics guru (my friend
who I consult about all thinks economic) told me to stop worrying.
Him: "Just what are they going to *spend* the cash
(that they get out of those bonds on), Lee?"
Me: "I dunno. Hmm."
Him; "They'll invest it somewhere. And where, pray tell, has
proven to be the best place to invest the loot, hmm?"
Me: "I dunno." (You can't really have much of a conversation
with Mark R. about economics.)
Him: "The U.S., pal. They *can't* withdraw it all! Understand:
we kept sending them little bits of paper while they sent
us industrial goods by the boatload. Was that fair?"
Me: "No, and?"
Him: "And so it got too expensive for us to keep sending them
all that paper with swiggles on it, and so we have taken
to sending them bits---ones and zeros---over the
communications links, and they turn around and invest the
ones and zeros back here, and then send us *more* goods to
cover the cost of the investments."
Me: "Ha, ha. So how does this even get better?"
Him: "Do you know what the Japanese economy is like?"
Me: "No"
Him: "Well, you wouldn't believe what a basket case....(etc)"
So that's how I stopped worrying about trade balances,
deficits, job "losses", etc.
Lee
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