Greenspan warns anew on trade deficit

Foreign investors likely will tire of bankrolling the bloated U.S. trade deficit, but the economy’s flexibility should help temper any fallout, Federal Reserve Chairman Alan Greenspan said Monday.

Greenspan’s remarks referred to the broadest measure of U.S. trade called the current account deficit, which swelled to a record $668 billion last year. The shortfall is financed mostly by foreign investors.

The huge current account deficits the U.S. has been running up each year “cannot persist indefinitely” Greenspan warned in prepared remarks. “At some point, investors will balk at further financing,” he said.