Globalization….lifted from comments
I lifted these comments by rl love concerning a way to look at our current discussion about jobs from Linda Beale’s post on Tax Foundation analysis:
Rl love writes on the nature of trade for the US:
Stiglitz: ” … the export of T-bills is different from the export of cars or computers or almost anything else: it does not create jobs. That is why countries whose currency is being used as a reserve, and exporting T-bills rather than goods, often face an insufficiency of aggregate demand.”
Now, if this ‘insufficiency’ is combined with the increasing reliance in the US on financial services, and on gains via the trans-national corporations, it becomes much easier to understand the logic of the ‘trickle-down’ theory in the context of Globalization. I am not advocating ‘trickle down’ here, but it does make our mess easier to understand. Stiglitz again:”…note that the world’s economies hold more than 4.5 trillion of reserves,increasing at a rate of about 17% a year. In other words, every year some $750 billion dollars of purchasing power is removed from the global economy, money that is effectively buried in the ground.”
The point then is that efforts to create jobs, such as Bush’s tax cuts, or such as those that are part of the stimulus attempts, are not possible to analyze with traditional criteria. Tax cuts for example do nothing to increase global demand for US goods, and, the additional US debt decreases global demand by locking up global purchasing power. Essentially, it has become almost pointless to evaluate the US economy as if it might be understood without the global implications, but that is mostly what economists in the US do, and largely as a result of denial. The simple truth is that the presumption that developing nations ‘should’, share ‘their’ demographic dividend with the developed nations was folly from the start, and based on a faulty premise that ignores the negative externalities in the economies of scale computations, and, additional layers of presumption regarding energy and all labor costs. So, the question is, does anyone actually believe that tweaking the US economy might solve our problems?
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More from Stiglitz:” the Uruguay Round made an unlevel playing field less level. Developed countries impose far higher—on average four times higher—tariffs against developing countries than against developed ones. A poor country like Angola pays as much in tariffs to the US as does rich Belgium; Guatemala pays as much as New Zealand. And this discrimination exists even after the developed countries have granted so-called preferences to developing countries. Rich countries have cost poor countries three times more in trade restrictions than they give in total development aid.”
And some economists in the US argue that tax cuts will solve our aggregate demand problems, as if the US role in the global economy has no consequences. Others claim that ending the alleged dependence on ‘foreign oil’ is the end all solution as if this has nothing to do with the global demand for US goods. As if Uncle Sam might just thumb his nose at the oil producing nations that we owe a couple of trillion to, as if. ~ray
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It is too bad that this subject matter is not more popular. Corporate taxes could be raised for instance, in say the G8 or so, and this could provide the much needed revenues to address some of the global demand issues such as those regarding the exploitive trade practices etc. An ‘exploitation reparations fund’ could also improve two other problems as well. 1) A higher corporate tax could cause shareholders to apply pressure to Executives in order to bring down compensation levels at the management level. 2) An institutional wealth transfer aimed at raising global aggregate demand would bring balance to the very imbalances that have caused the economies of Japan and the US to be overwhelmed with investment capital.
The lack of ‘popularity’ though in these types of solutions is indicative of just how protective the citizens of the developed nations have become. At some point, “to conserve’, is the monkey with his hand stuck in the proverbial jar. And it is interesting how populations with roughly half of their voters who see themselves as ‘progressives’, when combined into a collective form, they ‘seem’ to transform in regards to global policies into power concentrations that are essentially fascist or ultra-conservative. Is it possible that the acceptance of selfish behaviors, over a long period of time, have caused a new form of collective mental illness, of a collective delusion? ~ray
(Making Globalization Work, 2007, pg.78)
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These two statements:
“…In other words, every year some $750 billion dollars of purchasing power is removed from the global economy, money that is effectively buried in the ground.”
and
“Corporate taxes could be raised for instance, in say the G8 or so, and this could provide the much needed revenues to address some of the global demand issues…”
seem to contradict one another. If there’s so much purchasing power buried in the ground, why would we need to raise corporate taxes to provide “much needed revenues”? The immediate problem is a global savings glut and too little private sector demand to soak up that savings glut. That’s why the US Treasury is able to hold these monthly auctions for godawfully huge amounts of debt and the price of the bond barely budges. We need governments to temporarily run huge deficits until private sector investment demand can get back on its feet.
These two statements:
“…In other words, every year some $750 billion dollars of purchasing power is removed from the global economy, money that is effectively buried in the ground.”
and
“Corporate taxes could be raised for instance, in say the G8 or so, and this could provide the much needed revenues to address some of the global demand issues…”
seem to contradict one another. If there’s so much purchasing power buried in the ground, why would we need to raise corporate taxes to provide “much needed revenues”? The immediate problem is a global savings glut and too little private sector demand to soak up that savings glut. That’s why the US Treasury is able to hold these monthly auctions for godawfully huge amounts of debt and the price of the bond barely budges. We need governments to temporarily run huge deficits until private sector investment demand can get back on its feet.
Well disagreeing with a Nobelist is clearly punching about 15 categories above my Featherweight class but I am baffled by this idea that reserves are somehow buried and represent some real net loss of purchasing power.
When someone puts money in the bank or buys U.S. Treasuries or invests in an IPO they are making an implicit bet that whoever gets the actual cash will put it to work more productively than they would. This bet may not pay off, the money might be lent to a house flipper in Phoenix or some wild hare scheme of inventing a perpetual motion machine, but either way the cash is converted into someone else’s purchasing power.
Now I can see that pure debt service could be an economic drag for whoever received the cash, but it is hard to see the investment itself as locking down anything. That cash transfer may result in more or less efficiency, or more or less velocity but it never it seems to be to reduce to stasis. It is not like there really is $100 of productivity physically locked into that Benjamin, instead all forms of money including ‘hard’ assets like gold are simply claims on future productivity.
Slugs,
Perhaps if you could explain why Japan’s huge deficits have failed to get Japan “back on its feet’ I could better answer your questions. And in part I should touch on one of your questions as part of my reply to Bruce.
divorcedone laid out the problem pretty clearly when he showed a chart of his flower sales and its decline over the last couple of years. Small business need customers and sales. These Keynesian stimulus bills are nonesense since they don’t stimulate the right kind of demand. They don’t put money in our pockets so we can buy flowers, have our kitchens remodled, or pay for a long weekend trip to New York or San Franciso to enjoy the culture and spend in thier local economies. Building another dam to nowhere or digging ditches and filling them up again is not what we need to be doing right now.
On Japan the Keynesians have gone out of their way to spin that Japan was not a Keynesian failure. If you look at what they spent on infrastructure it clearly was. We’re in deep stuff right now because our leadership out of their left wing ideology insists that we try to right ourselves with policies with a history of not working.
Bruce,
First let me say that I am honored that Rdan has posted this compilation of comments, but I am also not prepared in any way so I need a little time here.
It was some time ago that I read ‘Making Globalization Work’ and so for now I shall rely on memory (?) but if needed I can find more specific info etc..
How Stiglitz comes to the purchasing power figure of $750 billion is unclear, but throughout the book he cites a long list of ways that wealth flows favor the developed nations at the expense of the developing nations. I doubt that the tariff imbalances that I mention in the post are included in the $750 of ‘buried’ capital but he does discuss inefficiencies regarding capital use throughout the book. The main premise has to do with poor nations lending to wealthy nations (T-bills) while also borrowing from wealthy nations at higher interest rates. He cites for example: ” In Ethiopia, the Fund [IMF] went so far as to demand that the country ignore foreign assistance in assessing whether its budget was balanced; in effect, foreign assistance went to increase reserves, not to build hospitals or schools or roads. Not surprisingly, the policies failed to bring growth. But the burden of debt remained.”
So when I initially posted my original comments I had assumed that Stiglitz was referring to the compilation of these negative interest flows although after reading your comment, and reading more of what leads up to the $750 bn conclusion, I am not sure of anything. I suppose that he could be using a formula that addresses what you said: “It is not like there really is $100 of productivity physically locked into that Benjamin, ” but, considering that the reserves total an excess of 4 trillion that seems to defy logic. So for now all that I know to do is to try to read my foot out of my mouth and say that I simply took his word for it. He is the most respected economist in the world after-all. And poor nations lending to rich nations is more than $750 bn worth of ‘backward’.
Stiglitz takes us down a dead end with his emphasis on information asymmetries. Its a dead end since you can’t do anthing about this. Some people will aways have more information than others. It’s just the way it is.
The modern elegant mathematical models that prove Adam Smith’s invisible hand are at the end of the day just models. Since they are not realistic they can’t prove anything. But they really do give us an idea on the fundamental characteristics of an economy. Krugman and Stiglitz wasted much of their professional careers finding counter examples to market efficiency. But at the end of the day their examples are trivial and just point to lack of perfection. They only thing I could tell them is that we don’t live in a perfect word and their work really has no significant practical application to make the markets and economies function better.
Bruce,
If I understand your premise correctly, you seem to be saying that people who have too little, should lend to those who have too much, because: “they are making an implicit bet that whoever gets the actual cash will put it to work more productively than they would.”
Considering the aforementioned imbalance due to tariffs, and that in extreme cases the populations of poor nations have received as little as 5% of the value from their natural resource bases (Stiglitz again), and that these nations are unable to develop their ag sectors in part to due to rich nations removing value from ag goods via subsidies, does it really matter ‘who’ uses the money in the most productive way? Then too I should probably note that in some cases the IMF encouraged poor nations to hold dollar related assets as criteria for credit status. Stiglitz cites Ethiopia as using IMF Funds to purchase reserves as opposed to building roads and schools etc.. So it becomes a question of who needs what, and I doubt that you think that US citizens could not do with a little less land-fill fodder. ~ray l
Well I would certainly agree that what the IMF has done to small countries is a tragedy, but mostly those small countries by definition don’t show up as ‘Major Foreign Holders of Treasuries’.
http://www.treas.gov/tic/mfh.txt
As of the end of November foreign entities held $3.6 trillion in US Treasuries which is about 75% of Stiglitz’s $4.5 trillion. Of the countries called out in the list only Egypt is even physically on the continent of Africa, just as Mexico, Chile, and Brazil are the only representatives of Central and South America. All of those other countries fall in the category of “All Others” with a cumulative total of $142 billion. And of course that doesn’t represent money removed “every year”.
From Nov 08 to Nov 09 foreign holdings of US Debt went up by $500 billion which has to the biggest component of that $750 billion. And while some of that cash extracted from those countries is being sat on by some of the big banks here, or being used in maybe sub-optimal ways by AIG and General Motors, that hardly means “buried in the ground”.
Nobody is going to be giving me a Nobel any time soon, I wasn’t that good at calculus even when I was studying it 35 years ago and ended up as a medievalist, but I am a fairly dab hand with a four function calculater. Plus I have thought a good bit about the function of cash (which as Yogi Berra reminds us, “is as good as money”) and it just doesn’t lock down in quite the way people like to think.
For example the United States doesn’t to a great degree give money in foreign aid, instead the vast majority of such aid is mandated to be spent on American products (mostly ones that go ‘boom’) and commodities which then by law have to be transported on American flagged ships. My State of Washington pretty much lives or dies on foreign trade, we are a huge exporter of hard wheat and civilian and military aircraft as well as apples and cherries. I don’t know what percentage of foreign aid ultimately flows back to pay the salaries of my friends and neighbors but it is a lot. (BTW the same is true for private charity, Bill and Melinda gates are true humanitarian giants doing untold human good in Africa, but a lot of those dollars actually land in the hands of researchers and vaccine makers right here in Seattle, each of whom probably has one or more computers running Microsoft Products). So money which itself is just reified productivity flows fast or slow, sluggishly carrying sediment or clear and bright, but it doesn’t pool, it doesn’t really get stuck in a Lock Box, one way or another it gets translated back into goods and services, and then the providers of those goods and services exchange it for others until ultimately that productivity ends up going down someones throat or ends up in a landfill.
Not to pile on but it kills me when people say that we spent billions in space from 1958 until today. We didn’t spend any money in space and only astronauts who carry lucky dollars even saw their money enter orbit. Instead we transfered some tons of metallic ores and sand that had been converted to structural metal, wiring, glass, and silicon based computer chips into orbit and ultimately let some of it reenter the atmosphere and burn up. And you don’t have to be a full fledged devotee of the labor theory of value to understand that most of the actual cash ended up being converted into groceries and mortgage payments
Slugs,
You seem not be recognizing that it is ‘whom’ that has the purchasing power that is the important thing here. The higher corporate tax would simply allow money to be taken from the global economy based on where there is too much, so as to redistribute based on where there is too little. And I fully understand how unlikely any such ‘Robin Hood’ economic plan is, and that was in fact my premise. The proverbial monkey with his paw stuck in the jar being my contention.
And as long as I am being a pain in the ass let me highlight this:
“As if Uncle Sam might just thumb his nose at the oil producing nations that we owe a couple of trillion to, as if. ~ray”
As of Nov 2009 the Treasury reported that what they classify as “oil exporters” (Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.) hold a cumulative $188 billion in Treasuries. Which puts this estimate off by an order of magnitude. On the other hand it adds four countries in Africa to my previous claim of one, and takes the Central/South American contingent from three to five. Ooops.
But I think the point still stands, people across the board exaggerate the degree to which foreign countries really have us by the financial balls. Our total cumulative foreign debt is still just a fraction of our GDP and roughly equal to our annual federal budget, It was only ten years ago that Alan Greenspan was worried sick about the prospect of us paying off all of our long-term debt. While things are really sucky today as a country we are not really in a worse situation looking forward than we were in 1992 with “deficits as far as the eyes can see”. This is not a suggestion that we should be all Pollyanna here, just that we need to resist the constant temptation to play Henny Penny.
rl love,
Deficits in Japan were just big enough to keep the economy from going over the cliff, but not big enough and not sustained enough to get Japan up on its feet. Half measures. And just as the Japanese economy would start to recover, they would start worrying about the deficit again. And to this day Japan’s big problem is too much saving. They are going into their third decade of flat growth and price deflation.
My criticism was to point out that the two comments in your post sounded contradictory. I don’t see where that contradiction has been clarified or addressed.
Bruce:” As of Nov 2009 the Treasury reported that what they classify as “oil exporters” (Oil
exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq,
Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria,
Gabon, Libya, and Nigeria.) hold a cumulative $188 billion in
Treasuries.“
This is only reserves held by governments and the Saudi Royal Family alone holds more T-bills than what you included. I don’t remember how much exactly but I just read a few days ago that the OPEC or GCC states have about the same amount in T-bills as the Chinese do. Which would explain why your calculations seem to be coming up well short of the Stiglitz figure of $4.5 T. The 4.5 T is also from 2006-2007 so I think with the flight to safety since then the number should be much higher now.
Other than that I think my earlier reply still stands: “If I understand your premise correctly, you seem to be saying that people who have too little, should lend to those who have too much, because: “they are making an implicit bet that whoever gets the actual cash will put it to work more productively than they would.”
There is one more thing though, lumping what I have said here with spending on space travel, well, I think ‘disengenuous’ does the trick. If you actually believe that putting purchasing power where it is most needed is similar to ‘money’ entering ‘orbit’, and that your efforts here constitute your presumptuous ‘piling on’, you do help to explain the collective transformation that I mentioned.
Cantab: “ These Keynesian stimulus bills are nonesense since they don’t stimulate the right kind of demand. They don’t put money in our pockets so we can buy flowers, have our kitchens remodled, or pay for a long weekend trip to New York or San Franciso to enjoy the culture and spend in thier local economies.”
Scuze me, but I thought that Keynesian policies are the ones that put money in our pockets, by putting people to work. Like the WPA and CCC, right?
Bruce Webb: “Well disagreeing with a Nobelist is clearly punching about 15 categories above my Featherweight class but I am baffled by this idea that reserves are somehow buried and represent some real net loss of purchasing power.”
Is that what is being claimed? My impression was this. The export of, say, a shipment of ball bearings, brings in money that pays for the investment and work involved in making the ball bearings, and then that money circulates in the economy to a certain extent, paying for more investment and work. By contrast, the export of a T-bill brings in money to the government, and that’s it (except for political considerations). It has no direct effect on government policy or expenditure. Rather, it is itself an expression of government policy. In the past, the government might have used the money to buy gold, but today it does not have to do so. That’s my impression, anyway. 🙂
ray: “Then too I should probably note that in some cases the IMF encouraged poor nations to hold dollar related assets as criteria for credit status.”
Sad fact that the IMF has been a force for economic imperialism. 🙁
Slugs,
I am of course fully aware of the “half-measure” theory in regards to Japan. I happen to believe though that a ‘full-measure” approach simply puts things back in the same problematic condition that existed in the first place. I also happen to believe that too much saving is about as ludicrous as it sounds. The formula for a healthy economy is earning, saving, and then investing those savings so as to keep incomes tied to asset values. So ‘too much saving’ to me implies too much investment of the wrong types. So your argument assumes that you are in agreement with some higher power who precludes you from having to give my pov the same respect that you assume for yourself. In other words, I see no contradiction, I simply see a redistribution of wealth that puts money where it is most needed. But I believe that the advanced economies can only function efficiently, and by that I mean ‘not wastefully’, by at least allowing poor nations to develop in what is the natural and empirical order and that begins with agricultural development. So this is a very complicated subject and my initial reaction to your first comment was that of doubting that you read the entire post?
But, maybe, I am just failing to understand why you think that ‘buried funds’ in poor nations, which if spent would drive up global aggregate demand, contradict, the slowing of domestic aggregate demand in the G8s caused by a corporate tax increase when these could be offsetting over time. This would then require the G8 economies to produce more instead of relying on debt (jobs), while also creating a
development fund that could then be used where needed. Of course the UN or some independent agency would be needed, but I never said this would be overly realistic.
Min,
Sad fact indeed, and what I am suggesting in regards to my fantasy tax on G8 corporations is a an agency to replace the IMF. As for corporations simply moving to other environs, my only solution so far is that of shooting the CEOs as needed. But I only used the fact that ‘raising’ the corporate tax gets too little consideration as opposed to ‘lowering’ said tax. So may theory is less than 1 day old, just a baby.
NB:
“Both income and spending are in monetary terms; income received
but not spent means—in the first instance, at least—accumulation of money balances.
Returning specifically to the entrepreneurial decision, an alternative to producing is to
accumulate (again, at least initially) money balances. When entrepreneurial expectations
about revenues from production are low, they will prefer to hold money. As Kregel
(2007) explains, Hayek had argued that the market would automatically operate to ensure
a quick return to the full-employment level of production because labor would be
diverted to produce gold to satisfy the preference for accumulation of money over
production of other commodities. Keynes’s response was that gold is not money, rather,
money is an asset with “special properties”: nearly zero carrying costs, elasticity of
substitution, and elasticity of production. The last characteristic means that when the
demand for money rises, labor is not diverted to its production. So long as there is at least one asset that is not produced by labor, it can become a bottomless sink of purchasing power, overturning Say’s Law and subverting any market forces to return the system to full employment.”
http://www.levy.org/pubs/wp_514.pdf
Krugman and Stiglitz do not try to make the markets function perfectly only to make them work towards some goal, some particular outcome. It is the free market ideologues who scoff at intervention and claim that a “pure unadulterated market”, while leaving some people out, is better. Its better simply because its “Pure”. They are not interested in outcomes only process. However it comes out is how its “supposed” to come out. Pure religious fundamentalism applied to economics. In other words……… BULLSHIT!
vimothy,
Thanks for the support. ‘BARBAROUS RELIC’ came to mind.
Hmm we know to the penny the amount of the $12.3 trillion of Public Debt that is held by the public. And the Treasury reports within narrow limits what portion of that debt is held by foreign countries whether inside or outside official government reserves.
Your suggestion that the Opec Nations hold as much debt as the the Asian countries do failin light of the fact that foreign holdings of $12.3 trillion of total debt in light of $4.5 trillion in Intragovernmental holdings can only be sliced so thin. There is just not that much debt left over.
Speaking of globalization issues, where is the blog focus on Europe’s credit crisis?
Bruce,
I did not say ‘Asian Countries’, I said China. And I do not understand your math here. The 4.5 T is from the Stiglitz quote from 2006-2007 (as I cited), which is from a different time, and, on a different subject insofar as what I said about Uncle Sam thumbing his nose at the oil producers. Your numbers, dates, and facts have been confused from the start and yet you keep bringing the insults. You also want ‘everything’ to be about ‘amounts’ as if a few billion here or there is not worthy of consideration, although I’ve was in Nicaragua in the 1980s when the Treasury had less than 3 MILLION dollars, or, about a dollar per person. Not long ago I read that the 7 wealthiest men in the world have more wealth than the 20 poorest nations. So nearly everything you have said was not only inaccurate and presumptuous, but beside the point.
rl love,
The formula for a healthy economy is earning, saving, and then investing those savings so as to keep incomes tied to asset values.
That is a good formula for a healthy economy. The problem is we don’t have a healthy economy right now. When you’re stuck in a liquidity trap recession the usual rules don’t apply.
Slugs,
Yes, the usual rules do not apply. Which is my premise more than it is yours insofar as what I am advocating. The cause of the current mess is not like anything that has happened before and so deficit spending must be seen in that context.
The Plaza Accords caused Japan’s bubble and lead to the ‘savings glut’. How then would more stimulus solve this problem considering the household debt problem in the US.. The Japanese economy relies heavily on exports but the Chinese now build more autos than the US does. So, part of Japan’s problem has to do with shrinking global market share issues and the lost decades were the result of too much domestic spending due to an overvalued Yen. More stimulus in Japan then would only be justified if there were more demand for Japan’s exports?
The problem is too little upward mobility on a global scale. There is not enough demand for loans in the developed economies, and not enough demand for goods produced by the developed economies. The Chinese having the world’s 3 largest banks after refuting the IMF recommendations (along with other Asian countries), is evidence that our reliance on financial services is problematic at best. So ‘any’ solution must be seen as a setback for at least the US and Japan, the IMF failures to ‘arrange’ the global markets to favor the developed nations has failed. The China-Asean free trade zone, and the Asean+3 emergency fund, are further evidence that a restructuring of ‘Globalization’ must occur. And by promoting global aggregate demand, or at least by not limiting it via exploitive practices, a long term solution is possible. There is hardship either way. ~ray
Movie Guy:
Rebecca did touch upon it here and as early as December
http://angrybear.blogspot.com/2009/12/this-weeks-greek-tragedy.html This week’s Greek tragedy Rebecca Wider
Greg,
Did you just try to make a point.
Slugs,
As an afterthought: Had Keynes not been marginalized in the process leading up to
the Treaty of Versailles; and had his ‘bancor’ been embraced at Bretton Woods; I think our current circumstances (human) would be much better than what they are. So I hope not to imply that I am anti-Keynesian or whatever.
Well I will consider the source and spell it out for you because I think it is important.
You opined
“Krugman and Stiglitz wasted much of their professional careers finding counter examples to market efficiency. But at the end of the day their examples are trivial and just point to lack of perfection.”
You are saying their work to perfect markets is senseless, trivial and end up pointing out what everyone already knows, Markets are imperfect. Your suggestion is that they are trying to make perfection where none exists or can exist. I disagree, they are not trying to perfect anything, they actually just seek a certain outcome.
It gets better
“They only thing I could tell them is that we don’t live in a perfect word and their work really has no significant practical application to make the markets and economies function better.”
So now you’ve given them the sage advice of “Dont try to guild the lilly. What your trying cant work and is totally impractical” Again this pure religious dogma. Leaving the economy in its “pure unadulterated state is no goal, its an anti goal, its go with the flow and sit back. Purity is not a goal, just like perfection is not a goal. Pure cyanide is still a poison.
I hope I allowed the SUBTLE points I was making to stop going over your head.
run75441,
The European crisis has taken on a new look since Rebecca provided that update 19 December. The problem is now larger. Portugal and Spain are added to the list, and who knows how many more European countries will experience problems before this is over.
run75441,
The European crisis has taken on a new look since Rebecca provided that update on 19 December. The problem is now larger with Portugal and Spain added to the list. Who knows how many more European countries will experience problems before this is over.
This is a credit crisis that can become very dangerous.
Bruce,
Not to pile on here but I want you to read the following, (and pay special attention to where says ‘proxy’):
“July 14, 2008 (Bloomberg) — Petroleum-exporting nations from Saudi Arabia to Russia are not only charging Americans record high prices for fuel, they are also poised to become the biggest creditor to the U.S. government.
Holdings of Treasuries by oil producers and institutions such as U.K. banks that are proxies for Middle East nations rose 44 percent this year to $510.8 billion through April, four times faster than the rest of the world, according to the Treasury Department’s most recent data. At the current pace, they’ll surpass Japan, which holds $592.2 billion, as the largest owner this month.”
That is a little old but it was all that I could find that included the ‘proxy’ factor. I would also like to point out that my offhand comment has Uncle Sam only thumbing his nose, it is ‘we’ who ‘owe’ the oil producers, which means that it was only your distortion of what I said that made T-bills a relevant issue. Our debt is not only held in T-bills of course and so my ‘2 trillion’ is close enough in the context given; and I knew this because it was only a week or so ago that I saw Prince Alajaweed on ‘Charley Rose’ and he was elusive about how much exactly, but he did say that it was about the same as China. The truth is they play this debt down for the obvious PR reasons.
So, here is what Stiglitz and the Prince have in common: they each have said recently that when talking with leaders around the world, they hear almost nothing but concerns about US debt levels. So perhaps you need to work on your ‘got us by the balls’ theory. And if you must use your half-baked math to insult someone at least show enough respect to get ‘close’ with your equations, and to make not-so-subtle distinctions such as those between ‘China’ and ‘Asian nations’.
Cantab likes to tell you what others are actually doing and what their motives actually are to frame his staements.
It is well worth watching as the EU ponders, and each nation looks to national interest as well.