America's Shutdown is China's Login

Herbert Walter

Says : the title of today’s post by Herbert Walter, Ex-Chief of Dresdner Bank (who led Dresdner Bank from 2003 to 2009) and a financial wizard, in German Business Daily Handelsblatt.

Commenting on the US shutdown's impact on the Capital markets across the globe, Walter writes that 'current the bizarre financial crisis in the United States' have not much impacted the markets so far because there exists 'apparently unshakable opinion' everywhere that President Barack Obama will get his budget through and ultimately everything will be alright.

According to Walter, a higher debt limit will save the country from insolvency but the solution offered will only be for the short term. The United States faces substantial damage of its reputation through the budget disputes. As a result, Walter foresees an accelerated descent of the country as the number one world power. He feels that "Quite possibly China will take its place in the long run." China has become the world's second strongest economic power in the last 20 years and accumulated huge wealth which is evident from the facts that it is the largest creditor of the U.S. and has more than three trillion U.S. dollars foreign exchange reserves. Walter predicts that - in view of the weak and unstable US financial strength - China will reset its wealth globally for strategic acquisition of companies, real estate, commodities and natural resources. (Source: Handelsblatt)