HOW YA' GONNA STOP THEM FROM INVESTING IN THE WORLD'S ONLY RELIABLE ECONOMY?

2 Fed Officials Offer Different but Upbeat Views on Debt (EDMUND L. ANDREWS, 3/11/05, NY Times)

Two top Federal Reserve officials argued on Thursday that the United States' record level of foreign indebtedness was unlikely to pose a major risk to the nation.

"The resolution of our current-account deficit and household debt burdens does not strike me as overly worrisome," said Alan Greenspan, chairman of the Federal Reserve Board, according to a transcript of a speech he gave to the Council on Foreign Relations in New York.

In his most sanguine remarks yet on the subject, Mr. Greenspan repeated many of his previous arguments that increased globalization of trade and finance allows the United States to borrow much more today than it could comfortably have done two decades ago.

While cautioning that "the free lunch has yet to be invented," Mr. Greenspan nonetheless said the world was undergoing a "one-time shift in the degree of globalization and innovation that has temporarily altered the specific calibrations" for evaluating economic imbalances.

A member of the Fed board of governors, Ben S. Bernanke, went even further than Mr. Greenspan by attributing the United States' huge and rising foreign indebtedness to a "savings glut" in Asia and most other parts of the world, according to a transcript of his speech to the Virginia Association of Economists in Richmond.

What's there that's worth owning?

Posted by Orrin Judd at March 14, 2005 5:43 PM