From Inflow To Outflow - And Its Effects:

In the late 1990s, European corporates sent over $US 600 Billion to the U.S. for acquisitions. That inflow has been slowing precipitously since 2000. In the second quarter of 2000, the inflow was $US 25 Billion. In the second quarter of 2001, it was $US8.2 Billion. It has now been reported that what was once a flood and later became a trickle has now REVERSED. In the second quarter of 2002, U.S. gross outflows to Europe were $US 6.5 Billion. European gross inflows to the U.S. were $US 1.7 Billion. That gives an OUTFLOW from the U.S. to Europe of $US 4.8 Billion. As already reported, the U.S. needs capital inflows of $US 450-500 Billion a year to"balance" their current account and trade deficits. Here is one source that has more than dried up - it has gone into reverse.

This is one of the main reasons for the slump of the U.S. Dollar this year. And one of the results of THAT is now coming to light. In 2001, U.S. MZM (Money of Zero Maturity) grew at its fastest rate for eighteen years, since 1983. The U.S. Labor Department has now reported that over the three months to the end of June 2002,"core" (raw) material prices in the U.S. have increased at an annualised rate of 28%. Since the end of January, the CRB (Commodity Research Bureau) index is up 14% while the $US index is down 12.1%. Prices are rising - inexorably - in the U.S..


<center>

<HR>

</center>