Will President Obama get re-elected in 2012 if his party suffers a crushing midterm defeat? His political team likes to point to the example of Ronald Reagan. Congressional Republicans were crushed in the 1982 midterms, but the Gipper cruised to victory two years later.
Great, great stuff from the great Andy Busch of BMO Capital Markets:
According to the US Treasury, the two largest holders of U.S. debt are China with $768 billion and Japan with $687 billion. Brazil owns $126.6 billion and Russia owns $138.4 billion. Without question, markets were nervous over the actions by these players during the last auction period by the US government. While it may seem that they are going to continue to buy US dollars and buy US debt, they are telling the world they are actively seeking alternatives. There may not be many alternatives now, but over long enough time frames there will be. More importantly, the BRICs are telling the world they want to find ways out of investing in a country that is fiscally irresponsible and unlikely (healthcare) to change their spending habits any time soon. Eventually, they will find a way.
OK, so it looks like Rising Asia is trying to get on the same currency page. Now lots of people think rumblings of the region dumping the dollar are empty threats. Where are they going to go, right? The euro? Please. David Goldman of the fantastic Inner Workings blog thinks he has it figured out bold is mine):