WASHINGTON, Sept 11: Federal Reserve chairman Ben Bernanke said on Tuesday the large US balance of payments deficit “cannot persist indefinitely” but for now is not an unduly large burden for the American economy.
In a speech in Berlin, the text of which was made available in Washington, Bernanke made no comments on the US economic outlook or Fed monetary policy.
“Although the United States current account deficit is certainly not sustainable at its current level, US liabilities to foreigners are not, at this point, putting an exceptionally large burden on the American economy,” he said.
He said the large US deficit to the rest of the world “cannot persist indefinitely because the ability of the United States to make debt service payments and the willingness of foreigners to hold US assets in their portfolios are both limited.”
“Adjustment must eventually take place, and the process of adjustment will have both real and financial consequences,” he added.—AFP
