A call for a new Bretton Woods type conference. I don't know, frankly, if the US would participate, and if we do, if we would do anything more than try to limit any such conference's work. Shades of Kyoto.
There will be such a conference before too long, I think, and it will look rather like a Creditors' Meeting for the US, in particular.
I don't think that there is anything that the US will really be able to do to limit its work either any more than any other debtor can direct their creditors.
papicek:
Ok, who has an answer to this: greater regulation on finance and a firmer grip on risk management will mean companies will find it harder to get access to the funds they need to operate. Fine, as far as that goes, it's a premise I'm willing to consider, but to what extent are companies already facing this condition? Are we going to lose more jobs? Are those jobs already the ones currently at the most risk anyways? Or already gone? Have the weak been culled by now?
Governments should be able to ensure enough credit to allow strong mature companies to operate, but there is a continuing cull gathering pace, I think, of those mature companies which have been weakened by private equity debt loads.
The biggest difficulty will be for start-ups and developing enterprises, since these are not 'bankable'. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Possibly. Don't underestimate the US's ability to manage outcomes internationally. At times we're very good, even if very underhanded at it. Depends on how aggressively China can leverage her status as the world's largest consumer now that the US is not.
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The biggest difficulty will be for start-ups and developing enterprises, since these are not 'bankable'.
Most of the smaller firms are more manageable risks, as they require less capital. Nobody is trying to enter markets, even now, where there are strong barriers to entry. So we're talking local franchises. I'd be more worried about a scenario like the big three automakers soaking up all the available capital retooling their lines to maintain competitiveness with Toyota and Honda, while similarly big firms trying to expand and/or diversify as well. (Global Marine planning on refurbishing its fleet for deeper drilling would be another great credit sponge, for instance.) "It Can't Be Just About Us"--Frank Schnittger, ETian Extraordinaire
China can leverage her status as the world's largest consumer now that the US is not.
China is a midget compared to the US and Europe. And need I remind you that it was Europe, not the US, that was the locomotive of the world economy over the years leading to 2007? In the long run, we're all dead. John Maynard Keynes
Your graph in that earlier diary was on growth. What's the situation in absolute dollars - or any currency you choose? "It Can't Be Just About Us"--Frank Schnittger, ETian Extraordinaire
But otherwise, their share of world demand is still pretty low. In the long run, we're all dead. John Maynard Keynes
China is not even close to being the world's leading consumer, but hardly a midget, and with lots more upside than either the EU or the US.
Source: CIA World Factbook. "It Can't Be Just About Us"--Frank Schnittger, ETian Extraordinaire
