>I don't agree that the Haussman etc "dark matter" thesis is necessarily
>lunatic. If you believe that there are rents earned by the USA as a result of
>its role as hegemon, then it is not obviously a loony thing to do to
>capitalise
>the value of those rents and treat it as an asset to set against the debt on
>the other side. If you don't do this, then you are bound to continually be
>surprised when the "net income from overseas" line is always much higher than
>you would otherwise expect it to be.
>
>I'm not sure I agree with the specific capitalisation rate used (assuming a 5%
>return on overseas FDI looks innocuous, but it's equivalent to a 20x
>PE ratio),
>and it is a big weakness of this thesis that it's a theory of the US current
>account deficit that doesn't work even a little bit as a theory of the UK and
>Australia. But the basic idea is sane and is probably part of the
>explanation.
As Goldman pointed out in its analysis of the thesis, if you use that constant capitalization rate, then the stock values are implausibly volatile.
Also: if it's a return to imperialism, then "dark matter" is a pretty misleading term. But just how does the US role as imperial hegemon increase FDI returns? And it's kind of absurd to apply this kind of analysis to debts, which have fixed interest payments. US net foreign debt is approaching 25% of GDP. Surely that can't be wished away.
Doug