Tuesday, September 09, 2008

Foreign powers calling the tune on the US economy

... foreign central banks now are in a position where they can influence, through their asset allocation, the allocation of credit inside the US economy.

... says Brad Setser.

8 comments:

James Higham said...

Well that reverses the FOMC influence then, doesn't it?

SACKERSON said...

Self-interested and lackadaisical is not the same as potentially hostile.

dearieme said...

He who pays the piper...

dearieme said...

I've left a wee comment at Setser to test American love of free speech.

CityUnslicker said...

China is in a tough position though. As its currency accumulates in price it loses money every time it buys us treasuries to keep demand up for its exports.

China is making a loss; the trade surplus is an accounting chimera.

discuss.

SACKERSON said...

CU: How about, they know it will end in a bust, but the longer this is delayed, a) the more of America they will own and b) the more they will possess (and the less the West will possess) of the means of production, for when the recovery comes?

DM: will have a look at your latest piece of cheek.

dearieme said...

Why has the Chinese government been so keen to fund American consumption? Why not Chinese consumption? Are they worried that a richer Chinese population would turn on them?

SACKERSON said...

First, destroy your external enemy. Then, destroy your internal enemy.