Thursday, June 19, 2008

To finance the trade deficit

"Using excess dollars earned as a result of the massive US trade deficit, foreigners are buying up big chunks of the nation's businesses and properties.

"The latest shoppers: Abu Dhabi for New York's Chrysler Building and a Belgian-Brazilian brewery for Anheuser-Busch..

" 'It's the single biggest transfer of wealth in the shortest period of time in the history of mankind,' says Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, a group of mostly small manufacturers worried by their loss of business to foreign companies.

" 'We can't continue to transfer US wealth at this rate. We are basically selling off the furniture to pay for Thanksgiving dinner,' says Peter Morici, a professor at the University of Maryland's business school in College Park. He roughly calculates that at the present rate of deficits, foreigners could own in a decade more than a fifth of the nation's total $35 trillion or so in assets of every kind - corporations, businesses, and real estate.

" 'We are very vulnerable now,' says Mr. [Charles] McMillion [of MGB Information Services in Washington]. To finance the trade deficit, the US must borrow money or sell assets worth $2 billion a day - a shift that will eventually erode American living standards, he argues."

-Christian Science Monitor

1 comment:

Richmond BC realtor said...

It seems terrific, but it's how market works. I know it's very delicate, especially in real estate. I am Vancouver realtor and time from time I hear from my friends "we shouldn't sell our houses to immigrants, foreigners and arabs...", but if you want to keep the wheels of business turning, you have to follow the rules...