Main U.S. Creditors Rub Shoulders

Having been burned by premature investments in ailing US companies, America's three biggest creditors are teaming up in order to push their agenda for a new financial world order since most European and American banks are trending towards bankruptcy, only held alive by irresponsible government guarantees these days.

PHOTO: Chinese Premier Wen Jiabao (L), Japanese Prime Minister Taro Aso (C) and South Korean President Lee Myung-bak shake hands after signing a joint statement for Tripartite Partnership. Photo: Xinhua

According to official Chinese media:

The tripartite cooperation will not only contribute to create a peaceful, prosperous and sustainable future for the region and international community, but also be crucial to address the serious challenges in the global economy and the financial markets, said the statement.

The statement also said the tripartite meeting in Fukuoka will pave the way for a new era of tripartite partnership which will lead to the peace and sustainable development in the region.China has repeatedly voiced its concerns with a dominant Western style financial system that is now failing on a wide scale. In the recent past China has tabled the future of the debt-ridden US economy, swinging widely between options.

The single biggest commonality between the 3 powers are their gigantic holdings of US debt and other US assets. Faced with the danger of exploding losses from these holdings because of America's nosedive into depression share a common problem they can only influence to a certain degree. As all other holders of US securities a stampede out of FRNs would wipe out a good part of these national savings.

Chinese Premier Jiabao said on Saturday that:

China can not only maintain a steady and relatively fast economic growth through efforts and getting over difficulties, but also elevate its economy to a new level by overcoming the ongoing financial crisis.

hina has repeatedly voiced its concerns with a dominant Western style financial system that is now failing on a wide scale. In the recent past China has tabled the future of the debt-ridden US economy, swinging widely between options.

Comments

[Balderdash:]

proofread please

2008 Dec 15 09:15 AM

[NOWHEREMAN:]

what else is new? These are the Asean leaders.

The GCC is doing something similar.

2008 Dec 15 04:34 PM

[jepittman:]

I fail to see the downside to three economic leaders, meeting to discuss mutual economic issues that impact their as well as the global economy. Your use of 'nosedive into a depression' is a little over the top. We are and have been in a recession. Their 'massive holdings of US debt' has, incidently, been quite profitable for them. I hardly think they are quaking in fear. They have options and they will discuss them. I see absolutely nothing ominous about any of this.

2008 Dec 15 05:21 PM

[nmelendez:]

Wait until the middle east starts talking about changing the oil currency from dollars to yen. jejeje.


On Dec 15 05:21 PM jepittman wrote:

> I fail to see the downside to three economic leaders, meeting to
> discuss mutual economic issues that impact their as well as the global
> economy. Your use of 'nosedive into a depression' is a little over
> the top. We are and have been in a recession. Their 'massive holdings
> of US debt' has, incidently, been quite profitable for them. I hardly
> think they are quaking in fear. They have options and they will discuss
> them. I see absolutely nothing ominous about any of this.

2008 Dec 15 08:02 PM

[NOWHEREMAN:]

When there is a Consensus opinion from a majority of economists, the Prudent Investor does the opposite.

2008 Dec 16 03:44 AM

[Prudent Inv...:]

Pls check my archive about my opinion in 2005/6/7 when I did not conform with the bullish crowd either. Macro data signalled it all back then. The debt-to-GDP ratio surpassed its 1929 high in 2002. This mountain of debt will not go away without hitting the whole world.

anyway, I wish all commentators a happy holiday season, who offer their insights and do not let a mistake escape.


On Dec 16 03:44 AM aitvaras wrote:

> When there is a Consensus opinion from a majority of economists,
> the Prudent Investor does the opposite.

2008 Dec 17 11:26 AM

[M.R. Henderson:]

The single most important commonality between these 3 powers may be their export geared economies with artificially low currencies which are as unsustainable as debt. Funny, I don't see Germany's Merkel there in the lineup.

2008 Dec 17 01:14 PM

[HaavBline:]

The author is reading way too much in a meeting like this one.

The meeting has been initiated by South Korea. What for? Korea, which traditionally adopts a riskier, high growth strategy and China and Japan, has been in a crisis in recent months, seeging the deep drop in the Korean Won and its currency reserve. The urgent objective of this meeting is really a call for help from South Korea's two bigger neighbors.

At a time of financial nuclear winter, it is natural for neighbors to get closer to draw some mutual support, and share some notes about their biggest common concern, their biggest common customer and common debtor, USA.

All three company is seeking very pragmatic things: world economic stability, increased voting power conssitiant with their rising economic contributions, but NOT a new world order.

2008 Dec 22 11:48 PM