Mostly rational politics, with occasional rants about how a few crazy Republicans are ruining the country.
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Tuesday, April 05, 2005
The Bad News Blogger
In my continuing efforts to catch up on reading from my vacation, I came across this editorial from Saturday's NYTimes. I hate to be a somewhat consistent poster of economic bad news, but I strongly agree with the sentiment of the editorial - that the combination of policies employed by the Republican government has put the economy in a precarious position of heavy dependence on foreign investment, which has many drivers - some of which are linked with American interests, and some of which are not. As Jubak and others have advised, I'm managing my investments cautiously at the moment because of the chance of a huge market-impacting event in the world economy.
The administration expects foreigners, mainly Asian central bankers, to keep plugging the trade gap because buying American securities increases their exports. It is also assuming that foreign central banks won't risk the losses in their dollar reserves that would occur if they started shunning dollar-based investments. In brief, the United States is betting that it's too big - in other countries' eyes - to fail.