Asia the Player

Gillian Tett, one of the Financial Times' star writers, contributed a sobering piece in today's edition about Asian sovereign investment vehicles and their influence on European financial issues. This excerpt from the article is noteworthy:

During most of the past 20 years, Europeans have assumed the US is the key source of power in global finance. However, the Busan episode [Inner Harbor note: a recent G20 finance meeting] shows how this is now shifting, and applies beyond the eurozone.

The BIS last week ranked western countries by their dependence on non-domestic sovereign bond investors. Greece and Italy topped the rankings. However, third came the US, which is currently selling almost half of its debt to non-Americans, many of whom are in Asia.

One very vexing development in the US is its debt situation. It's just not a good idea to live on the kindness of strangers. At some point, their money will purchase influence that may not be in our country's national interest.

Few policy makers are willing to speak publicly about where the money to pay for the United States public and private debt will be found. Where's the funding going to come from?