Reply #4: I think this is a good summary of the big picture - [View All]

...great policy recommendations. Unlike the phony intellectuals from the neo-con think tanks, Clark's analysis and recommendations are based on fact, a realistic assessment of the limits of American power, and the wrong headed policies of outsourcing, tax cuts for the rich, military adventurism, and imperial over reach. He calls it overstretch.

I pretty much agree with every thing he says with two small caveat's. Other than China, I don't know of other major economies with higher interest rates than the US. Of course, this is a defensive move at this point as a result of the very trends he describes, to wit, the collapse of the dollar vis a vis the Euro. There has been some talk lately about pressures on France and Italy, whereby ECB interest rate spread decreases are hurting their exports.

My only other qualification is that it appears to be unknown what level of dollar imbalances are caused by US multinationals booking their revenues overseas (typically in Cayman Island type wholly owned subsidiaries) to avoid taxation in the US. This may be insignificant in terms of the current accounts deficit, but no one talks about it and no one seems to know how much it is. There should be full transparency on this so it could be properly considered or disregarded if it is not significant. My brother who is an author on corporate tax advisory service can't believe this is true, but it has been documented by the Center for Public Integrity as a major method of tax avoidance by American multi-nationals and a method to keep capital accumulations outside the US.