The Ongoing Chinese Annexation Of The US Consumer

Saturday, August 29, 2009

Recent conversations over the symbiotic relationship between China and the US all end up focusing on three key concepts:

1. The lopsided trade balance (China exporting and the US importing)
2. China's willingness to continue investing in US assets even with a declining dollar, a debt load which will likely one day result in a payment moratorium (the banana republic syndrome) and collapsing economic drivers
3. Who can inflate yet another fiat bubble faster (opinions are split here, although China is conclusively in the lead for the time being) and deflate respective massive debt burdens

There is much more, but ultimately these three are what it all boils down to...


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