World must not rely on American consumer- Snow

[UpInArms]

http://reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=3491544

DUBAI, Sept 23 (Reuters) - U.S. Treasury Secretary John Snow warned on Tuesday it was unhealthy for the global economy if countries depend on American consumers for growth, saying other nations needed to foster home-grown expansion.

As he prepared to head back to Washington after a 10-day swing through the Middle East and a weekend meeting of Group of Seven finance ministers in Dubai, Snow said too many countries were relying on export-led growth.

"While export growth can serve a useful purpose, you can't have a successful world economy if everybody relies on the export sector," he said. "Then, you build in imbalances."

"So there's increasing acceptance that particularly the major economies of the world need to focus on their demand-led growth, take steps to put in place reform policies that allow their domestic economies to perform well."

...more...

oops! it appears we have broken the back of the American consumer.

[soupkitchen]

1. Well, where are the foreigners going to get the $$$ to fund our deficeits?

[Paschall]

2. My thoughts exactly

oops! it appears we have broken the back of the American consumer.

But why would he warn the rest of the world?

I wonder if, instead, they're not about to unleash some hokey "buy American" campaign. Shopping for Victory in the War against Terror.

[marshmellow]

3. "Reality bites" tour

People have taken a low interest second mortgages to buy stuff. Those low rates will evaporate after the 2004 election to compete with treasury notes required to meet the growing deficit interest.

Those countries and companies overseas will most likely see a nose dive in demand from the US consumer in 2005. Snow is advising them to not count on the US consumer so as to protect the banks from which they borrow capital.