On Sat, 11 Jun 2005 20:56:54 -0700, Frank Gilliland
wrote:

Because too much of the money that's being borrowed at the lower rates
is being funneled out of the country as foreign investment capital,
which explains why it's having almost no effect at stimulating the
economy -- it's not ending up in the hands of American consumers as
was expected. This also explains why the rate has been held so low for
such an unprecedented length of time. But the Fed doesn't establish
foreign policy, and they can't hold the interest rates down forever.
Something has to break pretty soon. Kinda like the hoses in my truck
if I hadn't replaced them today.
*******

And not to mention that the FMOC has rasied rates eight times in their
last eight meetings. I guess inflation is not heating up?

No, the trade deficit with China is due to China pegging their
currency to ours. This sets a fixed currency exchange rate that has
existed now for about ten yrs. China can pump goods into the US and
not loose value in currency exchange. The US consumer has borrowed
totheir friggin eyeballs and about 60% of their spending has gone into
buying Chinese goods simply because they are affordable and now have
relatively decent quality.

Yes the borrowing has gone to China in the flow of currency for goods.
You ought to look at some data on the US economy lately and not dwell
on what happened 6 yrs ago. Look at trends of government spending,
consumer debt, employment numbers.

james