Summary of The Shadow Market

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Rating

7

Qualities

  • Eye Opening
  • Overview
  • Engaging

Recommendation

Journalist Eric J. Weiner exposes the hidden, underreported group of countries and specialized national funds – “the shadow market” – that exerts a huge influence on global and American financial markets, and, indirectly, on US foreign policy. His interpretation of economic forces underpins his case that the US should prepare to play a diminished role in the global economy of the future. He does present a disturbing scenario: Massive public debt held by foreign entities renders the US vulnerable to economic and political manipulation. Weiner clearly believes the US’s future will be very different from its past, but his sometimes hyperbolic tone gives the book a veering-on-xenophobic cast. Nonetheless, getAbstract considers his book an absorbing read for those interested in the new economic factors challenging America’s position in the world.

About the Author

Barron’s and Kiplinger’s named Eric J. Weiner’s first book, What Goes Up, one of the best books of 2005. Formerly with Dow Jones Newswires, he has written for The Wall Street Journal, The Los Angeles Times and The Boston Globe.

 

Summary

What’s Really Going On

Before the 2008 recession began, the US was the world’s economic powerhouse. But as the recession took hold, decimating businesses and draining the capital markets, the US economy desperately needed more cash. In late 2008, the George W. Bush administration sent emissaries from the US Treasury to Kuwait, Saudi Arabia, China, Singapore and Abu Dhabi to request multibillion-dollar capital investments. But these countries rejected the Americans’ entreaties. Already damaged by the failures of Lehman Brothers and Bear Stearns, these nations did not want to assume more US exposure. Without these crucial funds, the US Treasury had no choice but to undertake huge bailout and stimulus programs that incurred massive debt for taxpayers.

The US economy has been weakening for years due to poor fiscal policies combined with excessive consumption and mountains of public debt. Increasing globalization requires capital, which the US can no longer provide, to fund growth. A “shadow market” fills the void. It operates secretly, uses sophisticated investing strategies and, according to projections, will exceed the financial power of the entire West in the near future...


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