The American system was completely unique. It leveraged U.S. global economic and military hegemony and the trust of European and Asian investors in U.S. institutions built up over generations.
To finance the technology bubble we sold them technology stocks of companies like Enron whose accounts were certified by U.S. accounting firms.
Then to finance the housing bubble we sold the Europeans securitized debt products rated as safe by U.S. ratings agencies. The Asians had wised up and didn’t play.
The trust is gone and must be rebuilt. That will take time. Now private foreign investors are reluctant even to buy Treasury bonds. We cannot make a bubble out of Treasury bonds.
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