By Charles H. Green
From Beijing, China
As I began a 19-hour passage to Beijing (October 16), immediately immersed in media published in China, by commentators with an entirely different outlook and interest. As the U.S. government shutdown / debt crisis was winding down, I was struck by how closely the rest of the world was watching our version of mud-wrestling playing out in DC.
The reactions were a bit embarrassing. Our closest allies and trading partners (Mexico, EU, etc.) were awestruck at how far we could go toward self-inflicting economic punishment on ourselves – which would undoubtedly reverberates into their economies.
Some of the recipient allies who accept plenty of foreign aid, trade and finger-wagging about responsible fiscal management and governance were understandably glib about the mess we had created. Think Egypt, the most recent target of American lectures.
China wasted no time to weigh in with rhetoric about the need for a new global reserve currency to replace the unstable U.S. dollar. As America’s largest creditor that holds an estimated one-third of their $3.6 trillion foreign reserves in greenbacks, they have a vested interest in a more predictable superpower that prints the world’s dominant currency.
Why is this perspective pertinent to small business lenders?
Because we are business people who have to deal with the economic conditions that are directly affected by the senseless squabbles witnessed over the past 60 days (and longer) in Washington.
Because as politically-affected bankers – dependent on a healthy SBA program horizon – we have a direct stake in the outcomes, and can as easily be negotiated away if not supportive to our backers and diligent about those against us.
Future growth prospects of many American small business is tied to exporting. The stability of the dollar, competitiveness of our products and interest rates matter in the global economy.
Keep an eye on things while I’m gone, okay?