Bernanke And The Shibboleths

This article explains how we have an excess desired amount of savings over desired investment. This article also relates to chapter 7 with unemployment. It says that if we were at full employment, demand for funds would be higher than equilibrium and expansion can hopefully take place. This can be attributed to over borrowing, which in turn left a lot of the world credit constrained (even at an interest rate of zero). The Fed speaks about persuading spending to offset these cuts.

U.S. Trade Deficit With China Widens

The United States Trade Deficit grew from 46.3 to 47.6 billion dollars in July. Economists today are concerned about China's dominance of trade on the effect of the current global economy. Furthermore, the Obama Administration is pressing China to allow its currency to appreciate, hoping to lessen China's exports by making them more expensive. In addition, even some government officials want to impose trade tariffs on China. Although economists have mixed feelings on how to lessen the imbalance, one economist suggested that U.S. consumers shift their consumption of Chinese goods to U.S. produced goods.