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GREENSPAN ISSUES WARNING THAT TRADE DEFICIT POSES RISK

The persistence of bloated U.S. trade deficits over time can pose a risk to the U.S. economy, which thus far has proven resilient, Federal Reserve Chairman Alan Greenspan warned today. Policy-makers must not become complacent, he said.

The broadest measure of trade, called the current account deficit, swelled to an all-time high of $166.2 billion in the second quarter of this year, the most recent period.

"Current account imbalances, per se, need not be a problem, but cumulative deficits ... raise more complex issues," Greenspan said in speech in Frankfurt, Germany. A copy of his remarks was distributed in Washington.

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