Saturday, May 15, 2010

Damien Ma Interviews James Fallows

Damien Ma, a Eurasia Group analyst, interviews James Fallows on China Today. Fallows is one of the most thoughtful and graceful bloggers that I follow. (My lists are woefully out of date; I’ll get around to fixing that one of these days.) For those of you who live in the Tri-State area, Damien* is also quite a charmer, and unattached, if I remember correctly.

Incidentally, I agree with most if not all of the arguments being made there.
* Damien is also one of the regulars at Rucker Park, where he is known as DunkMaSter D, and The Ragin’ Asian. True story.


Matt D said...

Both the interviewer and Mr. Fallows agree China would not *dump* their US bonds to *hurt* America.

Who would argue with that? Certainly not me. Of course, they are right.

The problem is that the situation is completely unstable because the US debt burden cannot possibly be maintained by China even if they wanted to. I expect that whatever happens will happen suddenly when it finally happens, and in retrospect look like it was inevitable.

One has to really deny reality to not see US government bonds as being anything other than a massive bubble waiting to be burst. Once that happens, what the new political realities will be, will be anybody's guess.

When will the bubble burst? Who knows? If everyone finesses it well, it could go on quite some time. But like a tower built on a bad foundation, the taller it gets, the more terrible it's going to be when it finally falls.

I guess, anyway.

Jun Okumura said...


I agree that the US debt, the Japanese debt, the Italian debt…

Pretty depressing, come to think of it. Some day, these governments going to have to slash entitlements, i.e. explicitly tax away implicit financial assets; embrace inflation, i.e. implicitly tax away explicit financial assets; and/or raise taxes. The upside is that this would actually benefit people like you and me who have to live by our wits—unless, of course, you have managed to use your no doubt considerable Charisma Man charms to snag a lifetime ride on the bejeweled palanquin.