Monday, 6 October 2008

Newspaper (USA) : 6th October The Wall Street Journal

America and the New Financial World. Zacharie karabell, The Wall Street Journal (en)
" ... In 1945, after an exhausting three decades of exertion against Germany, the United Kingdom emerged militarily victorious only to see itself economically exhausted. A year later, it was bankrupt, unable to find capital and on the verge of collapse. It had nowhere to turn but the U.S., which then dictated terms that amounted to a withdrawal of Great Britain from the world stage ...
... In the past five years, there has been a transfer of wealth from the U.S. and Europe to Asia, the Middle East and Russia of trillions of dollars for oil and raw materials as well as inexpensive manufactured goods ...
... As the U.S. government plunges into the markets, we must understand that this is the end of an era, and that attempts to unilaterally force capital to stay here will only lead to its continued flight. We are now one market among many, a huge and affluent one to be sure, but a wise nation recognizes both its strengths and its limitations. A more secure domestic capital base depends on the U.S. being seen as a desirable place for investment, and not as King Lear raging against the storm, alone, deluded and abandoned."

2 comments:

the8thcircle.com said...

...the end of an era...We are now one market among many, a huge and affluent one to be sure...

I'm skeptical of such historical threshold predictions, right as they are allegedly occurring. This may as well be the cut-off point for an era, but it may also be a regular cyclical crisis on the likes of S&L in the late 90s.

EuropeanStreet said...

Three majors differences could made this crisis a cut-off point.

First the IT Revolution, which has transformed any computer connected on internet to a Giant and almost free Encyclopedia. Consequently, it has level down the cost of every markets entry.

Second, The Western World has lived below his means for a long period of time. Customers bought goods not with their wealth, but the with their expectation of what will be their wealth in few years (loans)

And third, the next revolution will be in Energy and no one tell still say who will be the loosers and the winners.

This 3 points combined with a Western financial crisis is making the situation very special.