NEW YORK, New York -- Blame the corporate jets, the bonuses, the lack of regulation, Phil Gramm or Anderson Cooper's magical hair. All of these things (almost all of these things) have been blamed for the collapse of the global financial sector. And it's all populist cant.
The real, underlying reason:
The Walter Duranty Report said it a month ago.
The Economist says it this week.
China's rigged monetary and trade system, which creates unsustainable surpluses, and the United States' unholy appetite for cheap money were the joint cause of the world's economic ills (and the cause of a chunk of the 5 years of castle-in-the-sky growth that preceded their arrival).
As The Economist notes, we may regulate the banking sector and dock John Mack's pay in coming years but there's almost nothing being done to attack the root of the problem. The Economist's prediction for the next potential great bubble: US public deficits funded by (you got it) Chinese purchases of US bonds.
And to think that in WWII Uncle Sam turned to the American people to buy his bonds; we now have neither the money nor the attention span nor the governmental will to make that small sacrifice for fiscal stability.
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