October 09, 2008

"Canada is not China"

So says a former Fed official as the USA seeks well-capitalized banks to clean up Wall Street's big financial mess. Of course that comment simply means that Congress won't balk if Canada banks start buying up American assets. Of course, Canada is not China financially either. Unlike Canada, China is sitting on a the world's largest collection of dollar bills and American debt. As the current election cycle is showing, bigotry and ignorance of the world beyond the United States' coastlines may sell politically but it continues to do serious damage to the now short-term prospects for American citizens.

In a related note, the remainder of the BRIC countries (Brazil, China, India) will attend Treasury Secretary Paulson's emergency G7 and later G20 summit starting tomorrow. Russia is already regular member. Will we see a new Bretton Woods emerge? We'll find out Saturday when the meeting is supposed to make an announcement.

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