U.S. living beyond means, Dodge warns

Just a little nuglet of wizdom that i came across this AM.....

Last Updated Mon, 30 May 2005 13:11:23 EDT
CBC News

OTTAWA - Bank of Canada governor David Dodge offered a bankerly rebuke to the United States on Monday for its borrow-and-spendthrift ways, which he suggested are a threat to world economic stability.

Less directly, he chided nations such as China for rigging their currencies to boost exports while building up larger and larger foreign-exchange reserves, creating a lopsided world in which Asian savings finance U.S. spending.
David Dodge: 'A country's external indebtedness cannot keep growing indefinitely' (CP file photo)

In the text of a speech to be given at a Montreal conference, the central bank chief warned of "large, global economic imbalances that have become the subject of increasing concern" to policy-makers.

"I am referring, of course, to the persistent and growing current account deficit in the United States that is mirrored by large current account surpluses elsewhere, especially in Asia."

Trade imbalance problems highlighted

His comments echo those of many economists who have watched the United States evolve from the world's greatest creditor nation to the greatest debtor as Americans saved less, consumed more and imported more. China, meanwhile, took over much of the world's consumer-goods manufacturing and used its export earnings to soak up vast amounts of U.S. debt.

Supporters of the Bush administration have tended to argue that the three U.S. deficits — in international trade, current account and federal budget — do not matter to a superpower that prints the world's most widely used money.

Dodge said the imbalances won't go on forever.

"At some point, they will have to be resolved. Why? For one thing, a country's external indebtedness cannot keep growing indefinitely as a share of its GDP. Eventually, investors will begin to balk at increasing their exposure to that country, even if it is a reserve-currency country, such as the United States.

"For another thing, the buildup of foreign exchange reserves by Asian countries will, eventually, feed into domestic monetary expansion and lead to higher inflation. These imbalances will ultimately be resolved, either in an orderly, or in an abrupt, disorderly way."

A basic problem is the mismatch in national rates of saving, Dodge said.

"Specifically, over the past decade or so, we have seen many countries outside the United States increase their saving by a very large amount, while at the same time, the United States has reduced its saving and has become increasingly reliant on foreign borrowing."

He said Asian countries built up foreign-exchange reserves partly as a cushion against a recurrence of the region's 1997-98 economic crisis.

"But more importantly, policies to encourage export-led growth in many Asian economies have exacerbated the situation. Some countries have actively tried to prevent an appreciation of their currencies by intervening in the foreign exchange market. In doing so, not only are they increasing the imbalances, they are also seen by some to be securing an unfair trade advantage and shifting the burden of global adjustment onto others."

Reports from China last week said there was no sign Beijing would speed up plans to revalue the country's currency, which is widely considered artificially cheap. Such a move would make Chinese goods less competitive in international markets and shrink the value of China's huge official holdings of U.S. government securities.

On Monday, Beijing reacted sharply to U.S. and European moves to restrict imports of Chinese clothing and textiles, which have flooded into western markets since a quota system expired in January. China cancelled plans to increase export taxes on many garments as a voluntary move to handicap its own producers, the Associated Press reported.


Don't hate to say it: told you so. All you dumbass republikans refused to admit that the asians were shoring up our economy. Anybody ready for a civil war?

xoxoxo

-angrywoofdog

Letter to Pre$ident Bu$h

This is a transcript/copy of the letter that has been sent to your president. Glad that something has been done! Read on:

-angrywoofdog

May 5, 2005

The Honorable George W. Bush President of the United States of America The White House 1600 Pennsylvania Avenue, N.W. Washington, D.C. 20500

Dear Mr. President:

We write because of troubling revelations in the Sunday London Times apparently confirming that the United States and Great Britain had secretly agreed to attack Iraq in the summer of 2002, well before the invasion and before you even sought Congressional authority to engage in military action. While various individuals have asserted this to be the case before, including Paul O'Neill, former U.S. Treasury Secretary, and Richard Clarke, a former National Security Council official, they have been previously dismissed by your Administration. However, when this story was divulged last weekend, Prime Minister Blair's representative claimed the document contained "nothing new." If the disclosure is accurate, it raises troubling new questions regarding the legal justifications for the war as well as the integrity of your own Administration.

The Sunday Times obtained a leaked document with the minutes of a secret meeting from highly placed sources inside the British Government. Among other things, the document revealed:

* Prime Minister Tony Blair chaired a July 2002 meeting, at which he discussed military options, having already committed himself to supporting President Bush's plans for invading Iraq.

* British Foreign Secretary Jack Straw acknowledged that the case for war was "thin" as "Saddam was not threatening his neighbours and his WMD capability was less than that of Libya, North Korea, or Iran."

* A separate secret briefing for the meeting said that Britain and America had to "create" conditions to justify a war.

* A British official "reported on his recent talks in Washington. There was a perceptible shift in attitude. Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy."

As a result of this recent disclosure, we would like to know the following:

1) Do you or anyone in your Administration dispute the accuracy of the leaked document?

2) Were arrangements being made, including the recruitment of allies, before you sought Congressional authorization go to war? Did you or anyone in your Administration obtain Britain's commitment to invade prior to this time?

3) Was there an effort to create an ultimatum about weapons inspectors in order to help with the justification for the war as the minutes indicate?

4) At what point in time did you and Prime Minister Blair first agree it was necessary to invade Iraq?

5) Was there a coordinated effort with the U.S. intelligence community and/or British officials to "fix" the intelligence and facts around the policy as the leaked document states?

We have of course known for some time that subsequent to the invasion there have been a variety of varying reasons proffered to justify the invasion, particularly since the time it became evident that weapons of mass destruction would not be found. This leaked document - essentially acknowledged by the Blair government - is the first confirmation that the rationales were shifting well before the invasion as well.

Given the importance of this matter, we would ask that you respond to this inquiry as promptly as possible. Thank you.

Sincerely,

Members who have already signed letter:
Neil Abercrombie
Brian Baird
Tammy Baldwin
Xavier Becerra
Shelley Berkley
Eddie Bernice Johnson
Sanford Bishop
Earl Blumenauer
Corrine Brown
Sherrod Brown
G.K. Butterfield
Emanuel Cleaver
James Clyburn
John Conyers
Jim Cooper
Elijah Cummings
Danny Davis
Peter DeFazio
Diana DeGette
Bill Delahunt
Rosa DeLauro
Lloyd Doggett
Sam Farr
Bob Filner
Harold Ford, Jr.
Barney Frank
Al Green
Raul Grijalva
Louis Gutierrez
Alcee Hastings
Maurice Hinchey
Rush Holt
Jay Inslee
Sheila Jackson Lee
Jessie Jackson Jr.
Marcy Kaptur
Patrick Kennedy
Dale Kildee
Carolyn Kilpatrick
Dennis Kucinich
William Lacy Clay
Barbara Lee
John Lewis
Zoe Lofgren
Donna M. Christensen
Carolyn Maloney
Ed Markey
Carolyn McCarthy
Jim McDermott
James McGovern
Cynthia McKinney
Martin Meehan
Kendrick Meek
Gregory Meeks
Michael Michaud
George Miller
Gwen S. Moore
James Moran
Jerrold Nadler
Grace Napolitano
James Oberstar
John Olver
Major Owens
Frank Pallone
Donald Payne
Charles Rangel
Bobby Rush
Bernie Sanders
Linda Sanchez
Jan Schakowsky
Jose Serrano
Ike Skelton
Louise Slaughter
Hilda Solis
Pete Stark
Ellen Tauscher
Bennie Thompson
Edolphus Towns
Stephanie Tubbs Jones
Chris Van Hollen
Nydia Velazquez
Debbie Wasserman Schultz
Maxine Waters
Diane Watson
Melvin Watt
Robert Wexler
Lynn Woolsey
David Wu
Albert R. Wynn