Thursday, July 01, 2004


Deficits (Trade and Fiscal) Do Matter II:

Elephant, from time to time talks about his concerns that our free spending government and trade deficit could come back to haunt us soon with an Argentina like currency devaluation. I've even discussed this issue with an economist that works in my building. (Yes, in DC people are actually employed as economists). What makes up different from other countries is that we buy so much stuff from everyone that it would be bad for all if or when these imbalances are 'corrected.' But this can't go on forever.

Here's a good perspective on what I'm trying to say.

America: the world's biggest hedge fund

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