Lizzie Borden If the creditor nations were to sell just a small proportion of their American assets, they could send Wall Street into a tailspin, with unpleasant implications for the net worth of many Republicans It is sometimes suggested that by triggering a sell-off, creditor nations would be cutting their own throats. Actually this is a characteristically myopic Western way of looking at things – a view that completely misunderstands how things have changed now that East Asians call the tune. The creditor nations are long-term holders who are largely indifferent to short-term fluctuations. As a general rule, East Asians hate drawing attention to themselves. But they are quite effective behind the scenes. One of the most important ways they wield influence is through major Wall Street investment banks, which by no coincidence are openly hostile to the Tea Party’s latest gambit. Wall Street banks spend large amounts on political contributions, typically backing both Republicans and Democrats. Their money gives them plenty of face time to advise American elected representatives on “good economics,” a term that more and more these days amounts to economics that serves East Asia’s interests. Meanwhile American investors generally are short-term thinkers who rarely show much intestinal fortitude in riding out market downturns.
Posted on: Tue, 01 Oct 2013 07:18:46 +0000
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