Reply To: Clinton years prosperity?


The monetary inflation and credit expansion was directed to capital projects overseas. American companies expanded investment projects in foreign countries. Foreign central banks then held dollars as reserve against their own currencies, which they inflated setting off monetary inflation and credit expansion in Thailand, Malaysia, and other East Asian countries. By the mid-1990s, nearly 70% of Federal Reserve Notes were held overseas. (Our merchandise trade deficit, a net inflow of goods into America, is balanced by a capital account surplus, a net outflow of dollars and dollar claims to assets from America.)