America’s shutdown: ‘US government is like bickering teenagers’
Young spoke to RT about the effects of the shutdown both domestically and worldwide.
RT:Patrick, you are an investor, so what does this do to you and the trust of people like you in America now?
Patrick Young: Unfortunately this is another example of how difficult it is to trust the American government machine. And machine it is because truly what has been shut down at the moment is a massive leviathan, even compared to what it was in 1995. But ultimately what would we like to see as investors is leadership and that is one of the problems we have at the moment. In 1995, the shutdown was quite different. Bill Clinton as president did seem to be in charge of the country. Unfortunately, Mr. Obama seems to be occupying the White House, but he doesn’t give us any confidence that he is actually leading the US. Ultimately right now investors are not taking any knee-jerk action. But of course what we are warming up to is that it is going to be another few weeks time somewhere between October 17 and October 20 when the American government will actually reach the point where it has to borrow more money. And the problem with that is that it has been drinking vodka like an alcoholic for 40 or 50 years and the bar tab needs to be paid. But in the meantime, they are hoping to get some more credit.
RT:Do you think the US could suffer a default if this crisis continues?
PY: Absolutely. There is no reason why it can’t end up
with a default. What we’ve got is Mr. Obama who is affectively
happier to go off and negotiate and have a quick conversation on
the telephone with the president of Iran than he is to talk to
those who are, after all, democratically elected representatives
in Congress. There is a problem. That is not to say that those in
Congress aren’t being remarkably stubborn at the same time. But
then again, everyone has been driven to extremes. We know that
during the last time the US reached such a hiatus, America lost
its wonderful, glittering, top-tier triple A rating. It lost that
because Mr. Obama does not seem to be in charge of the country
and because he is certainly not stewarding the finances in any
way that is remotely coherent going forward. The US needs to go
on a diet. At that point in time, investors will be happier and
of course there will be much less risk of a default.
RT:This crisis may not last very long and the US economy is showing signs of a recovery. So it is not looking that bad for the future, is it?
PY: No and it is very important to understand where we are in this perspective and that is of course this little bubble that is Washington, DC politicians love to make a drama out of anything they possibly can. What might happen is that people will see that the loan arm of government doesn’t do that much for them. Private enterprise can still manage to carry on. And private enterprise has been the engine of growth in the US economy. The economy is returning to growth. At the same time, as investors, we don’t like the idea that the government is willing to play with fire. And that is what we have here – a dispute that frankly looks like a few needy teenagers, but instead they are the government of the US, bickering over something in their backyard which we really shouldn’t have an argument over whatsoever.
RT:What are your thoughts on the dollar? Some are saying this should lead the call for more alternative reserve currencies to be investigated. Is it really true? To challenge the dollar over this crisis?
PY: We have reached a point where we are at the Copernican Revolution in finance. Things like Bitcoin, crypto currency, and other alternatives - possibly something like the Chinese yuan or the Indian rupee - are going to become a much more important reserve currency going forward. The US dollar has been incredibly vaulted as an economic and military superpower of this age. Over time, that is bound to erode and we are going to see more alternatives. And to that end it might rather be a case of ‘in Bitcoin we trust’ in the future rather than the US dollar.
RT:And what about the impact on the European economy? Are alarm bells sounding there?
PY: The implications for the European economy right now aren’t particularly considerable. They’ve got this scintillating mass of their own creation through incredible spending, massive unemployment, and all sorts of other crises, that a little blip in the US budgetary discussions will not derail Europe’s economy. Brussels has already done that by itself.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.