The Shadow Market

August 2, 2010
For Weiner (What Goes Up), the “shadow market”—an invisible nexus of wealthy nations, hedge funds, and private equity funds—controls access to capital and natural resources, and by extension, the global economy. The author attributes this shadow market’s rising influence to the secrecy surrounding its participants’ actions: since investing and business decisions are made behind closed doors, they are impossible to regulate. The book’s lengthiest discussion is devoted to the ascendancy of China, whose current account surplus is fueling extraordinary growth in its exchange reserves and whose financial policies “were a major contributor to the expansion of the U.S. lending bubble.” Weiner is equally concerned with the losers in the world’s new economic order, devoting significant space to the U.S. and “Old Europe,” both of which he considers to be poorly positioned to protect their interests in the next century. This informative, admirably lucid book is less concerned with exposing the shadow market’s influence than with placing its emergence in the context of a larger geopolitical shift in power from the West to the East.