Friday, January 02, 2009

State of the World

People with loose money still think we're the Hill. That's why all the loose change is moving into Treasury bonds. I mean, if you buy China, you're basically buying US Treasury Bonds anyway... Japan is old and gray and has no rate of return... Rich Europeans can't take Europe seriously. They're afraid it will turn into an actual empire instead of their toy trading bloc, so they're always parking their cash somewhere far outside their own legal jurisdiction...

So what does that leave you, if you've got a spare 50 billion? Brazil? Russia? India, for heaven's sake? What kind of rich person preserves his wealth in INDIA? You'd have to be crazy. Should you buy oil? Oil's got blood all over it and it's skyrocketing up and down.

So that leaves the Americans -- the global wealthy are clinging to 'em like a drunk to a lamppost. When Russia collapsed, every Russian with a shred of wealth shipped it to Cyprus and Switzerland. The Americans don't have a place to offshore their money. They can offshore their LABOR, that's dead easy, but their money? If the American dollar goes, finance as an industry gets the blue screen of death.

--Bruce Sterling
Annual SotW Thread on the Well

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