Two top Federal Reserve officials argued on Thursday that the US' 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 Federal Reserve Board Chairman Alan Greenspan, according to a transcript of a speech he gave to the Council on Foreign Relations in New York.
Greenspan 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.
Although Greenspan acknowledged that globalization had its limits, he said it was impossible to know how long the trend could continue.
"The closing of our frontier at the end of the 19th century, for example, did not signal the onset of a new era of economic stagnation," he remarked.
A member of the Fed board of governors, Ben Bernanke, went even further than Greenspan by attributing the US' 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.
"Over the past decade, a combination of diverse forces has created a significant increase in the global supply of saving -- a global saving glut," Bernanke said.
Bernanke acknowledged that this shift could pose problems for the US at some point. The flood of foreign imports has led to a "shrinkage" of US manufacturing and its potential for exports, he said. But like the Fed chairman, Bernanke said the imbalances would gradually readjust on their own, and added, "I see no reason the process should not proceed smoothly."
The fairly upbeat Fed assessments ran counter to those of some outside analysts, who warn that the nation's soaring trade and financial deficits could lead to a severe drop in the value of the dollar and perhaps to higher interest rates.
Analysts estimate that the US trade deficit soared to more than US$600 billion last year, or nearly 6 percent of GDP.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from