A Quote by Martin Feldstein

To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world. — © Martin Feldstein
To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world.
Somebody's buying these treasury bills at 1/20th of one percent. I mean we consuming about $2 billion a day of goods and services beyond what we're producing.As long as we consume more than we produce, and we trade away little pieces of the country daily, they're going to own something. Now, they can't run from American assets. I mean every day the rest of the world is going to have about two billion more of American assets than we have, as long as they sell us these goods.
That would be nice if [people] stuck [treasury bills] all under a mattress, but they got to buy something with them. Sometimes they buy a treasury note, sometimes they set up sovereign wealth funds. They can do all kinds of things. They can buy our companies here. As long as we consume more than we produce, and we trade away little pieces of the country daily, they're going to own something. Now, they can't run from American assets. I mean every day the rest of the world is going to have about two billion more of American assets than we have, as long as they sell us these goods.
Why can't we simply borrow what is useful to us from Buddhism, Hinduism, Taoism, especially Zen, as we borrow from Christianity, science, American Indian traditions and world literature in general, including philosophy, and let the rest go hang? Borrow what we need but rely principally upon our own senses, common sense and daily living experience.
China are running trade deficits with the rest of the world. If you look at the U.S. trade deficit, it's close to $800 billion trade in goods. Half of that is with China, so it's a big part of the problem. And the problem with China, as opposed to, say, Canada, is that China cheats.
It's good for America when the rest of the world grows, because you can sell more to the rest of the world.
In the 1930s, there was a stretch where you could borrow more against the real estate than you could sell it for. I think that's what's going on in today's private-equity world.
In the 1920s you could buy stocks on margin. You could put 10 percent down and borrow the rest against your stocks.
It so happens that because all the economies are strongly inter-connected and aggregated, there is trade that is happening not just from China to the rest of the world, but from the rest of the world to China as well, and that is going to continue.
Sorrow, on wing through the world for ever, Here and there for awhile would borrow Rest, if rest might haply deliver Sorrow.
We take smaller companies and middle-sized companies, all around the world, and we do currency exchange for them; we raise bonds and equities for them; and we do inventory finance, trade finance, and custody of assets.
I built an unbelievable company. Some of the greatest assets anywhere in the world, real estate assets anywhere in the world, beyond the United States, in Europe, lots of different places. It's an unbelievable company.
The good thing about the dividend-paying stocks is, first of all you have stocks, which are real assets if we have some inflation. I think we're going to have 2%, 3% maybe 4%. That's a sweet spot for stocks. Corporations do well with that. It gives them pricing power. Their assets move up with prices. I'm not fearful of that inflation.
The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit.
U.S. capital formation, which has been pretty high in the '90s and very high in the late 1990s, is what is being financed by the savings of the rest of the world, generally poorer than ourselves, because our deficit on current account, chronic deficit, is their surplus, and they have been willingly bringing that to the American market.
And what gift of America to the rest of the world is actually most appreciated by the rest of the world? It is African American jazz and its offshoots. What is my definition of jazz? Safe sex of the highest order.
As the U.S. trade deficit, and the portion of that deficit attributed to China, continue to grow, our own economy is at risk of losing its reputation as a leader in world trade.
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