We are in waiting for the nine hundred pound gorilla residing in congress to pay our debt. We elected him to office. However, economies of the world must share in that indignity. He sits in the house chambers absently picking at the remnants of a constituency that has little regard for legislation. We wait for him to ratify a continuing resolution to release monies for our debt owed. This large primate has a lack of understanding of how the inability to act influences economies large and small, countries and households. The longer they delay in paying our bills, the more our good name as the financial haven of last resort is tarnished.
Continuing Resolution
The friendly but inflexible ape is rapidly becoming an obstruction in the global economic machine. In our current financial universe of wealth builders, borders become invisible. When one player defaults, it tips other financial centers and exchanges into a financial oblivion. It is a place never visited before – because our bills are always paid. While many political pundits will attempt to down play the importance of the nine hundred pound gorilla. He has a crucial impact on global economies. They do so because of their lack of understanding of how interconnected global wealth behaves. Every minute of every day, exchanges and banks transact borrowing for daily operational cost of businesses. Payrolls, manufacturing of goods, transportation all require monies borrowed and lent across sovereign borders. Let us forget, for a moment, the actual wealth of our country. Understand that our truest value lies in our good name. Living within an echo chamber of partisan rhetoric, fiscal leaders are unwilling to view how their decisions influence that good name. The United States is the globe’s nominal wealth haven.
All of our circulating wealth is built on full faith that there is a stern support stratum of liquidity. Should faith be shaken the act of borrowing money daily to do business becomes expensive. The effects of congress not paying our bills ripple throughout the pond. This will affect the mother on public welfare. It affects the economics of the storeowner on Main Street. He will suddenly see an increase in his lending rates. The grocer hikes the price of meat and vegetables. Dock owners see freight sitting on docks waiting to be offloaded. Trucks sit at weigh stations and cartage companies experience a loss in shareholder wealth. Foreign investment becomes problematic because the gorilla is seen as not allowing normal fiscal policy to behave smoothly. The longer the silver back sits in complacency in the assembly hall of congress. The larger the problem in the real world becomes. We are all dependent on Congress’ successful navigation of its fiscal responsibilities.
In an objective perspective, perhaps when a sovereign is singular and the democratic process is absent. In this case, the ruler can pivot on the influence of a few well-paid SMEs – not a group of bickering politicians. The alternative is attempting to understand how a nine-hundred pound gorilla thinks.
