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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (37208)	7/28/2005 7:06:43 PM
From: futures speculator	Read Replies (2) \| Respond to of 110194

China won't end up the one who is holding the bags<g>. China has too many poor people need to be taken care of that it can simply not afford to do that. Here's what Stiglitz has to say in latest article in FT: "There is a myth of mutual dependence: China needs to export goods to the US, which needs China’s money to finance its deficit. But China could easily make up for the loss of exports to America – and the wellbeing of its citizens could even be improved – if some of the money it lends to the US was diverted to its own development. China has huge investment needs. If its government is going to lend money, why not finance its own development? Why not fund increased consumption at home, rather than that of the richest country in the world, to pay for a tax cut for the richest people in the richest country, or to fight a war which most view as anathema? But the US could not so easily make up for the gap in funding without large increases in interest rates, and these could play havoc with the economy." news.ft.com Read the rest of the article, it's interesting. PS: Stiglitz is University Professor at Columbia University and was awarded the Nobel Prize in economics in 2001. And was economist in IMF until 1999