Most Wednesdays I focus on some aspect of Australian life. Instead, tonight a brief comment on the US spend and debt crisis.
As I write, the crisis drags on. This New York Times article provides a good description of the current position. You can see why the Chinese might be miffed. One interesting feature is that the proportion of China's international reserves held in US dollar denominated securities is apparently down to 60%. That's actually a huge shift. Meantime, some of the risk money seems to have shifted to Australia, pushing the Aussie dollar back up.
The problem will sort itself out through some form of compromise, although this may not happen until after the critical deadline. The biggest global risk now is summarised in some of the Armageddon headlines that are around. Yes, there are structural features build into the financial marketplace that risk triggering not very sensible responses. But beyond that, the real risk lies in individual and organisational responses driven by short term reactions.
Whatever happens, the damage done to the US's economic dominance will be permanent, accelerating the search for alternatives. Actually, that's no bad thing.
All this does, however, give me an immediate personal pain. I have an economics column due now, a 2,500 word lead economic outlook article due next week. And I'm damned if I know what to write!
A Wall Street Journal view.