Hi Bill,ALthough currency-issuing gemvrnoents aren't going to default on their debts (unless they choose to), do you think that certain countries (such as the US) with very large and growing trade deficits might eventually face a harsh balance of payments crisis? It seems to me that the longer these large trade deficits are allowed to grow, the worse the potential for a serious currency crisis becomes, especially as deficit countries become increasingly dependent on imports. Not addressing this potential problem whilst pursuing gargantuan compensatory budget deficits might be a bit like putting a sticking plaster over a badly infected wound. This deficit-spending approach might be fine if the inherent rebalancing mechanism of floating currency exchange rates was allowed to operate, but at present this is being subverted by currency manipulating countries such as China. I just read Godley's paper seven unsustainable processes where he points to this as the greatest potential future threat to the US economy. Nowhere does he mention that the US might default on its debts why should it? But he makes the case that this might not even be relevant in the case of a sudden and dramatic fall in the value of the dollar. What do you think?

トップ   新規 一覧 単語検索 最終更新   ヘルプ   最終更新のRSS