Hillary Clinton traipsed around China with one message: Keep buying our debt. We need your money to stimulate our economy.
That might start to look risky to the Chinese, who can’t really believe that the US’ AAA-rating is all it’s cracked up to be. But in order to keep them on board, we’ve already started promising our foreign financiers that we’ll bail them out if their US investments go sour.
The bailout of AIG was really just a bailout of the company’s counterparties, many of which were based in Europe.
And when we bailed out Citigroup (C) we ensured that the foreign holders of preferred shares would get a nice premium, so that they didn’t have to get a massive dilution like everyone else.
But we can’t complain, because we depend so much on their money. How could we not bail them out?
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