Billmon also has an excellent post discussing yesterdays historic - and largely overlooked - news that China has decided to unpeg is currency from the US Dollar. Here's the take away
--------
| The factors that have allowed the United States to run enormous, sustained current acount deficits -- deflation, globalization, the Asian savings glut -- may persist for some time. But sooner or later, the sheer size of America's external liabilities is going to force foreign creditors to limit their exposure to our reckless financial behavior. Solvency, not relative rates of return, will be the issue on their minds then.
BW II only postpones the day; it can't prevent it. By allowing America to go steadily deeper into debt, it also makes the day's arrival more certain and more dangerous. And by modifying the dollar peg -- even if only slightly -- China has set the clock in motion. |
6 years ago this nation was on the fast track to financial solvency. And then along came President Bush and the Republican Party. One day I suspect this nation will look back and wonder how it managed to get things so spectacularly wrong in such a short period of time.
--------
0 TrackBacks
Listed below are links to blogs that reference this entry: AND WHILE I'M AT IT.
TrackBack URL for this entry: http://www.alexwhalen.com/cgi-bin/mt/mt-tb.cgi/2087
Subscribe to this blog's feed
Leave a comment