To: carranza2 who wrote (66876 ) 10/5/2010 11:29:57 PM From: Hawkmoon Read Replies (1) | Respond to This is the closest I've yet seen of an analyst referring to what I've been calling for over a year the "Manufacturer Financing" policy by Asian nations, particularly China:China has maintained a cheaper currency to the West, but to protect their economy from overheating from the flood of dollars in exchange for their goods they have been recycling the dollars back into US assets, namely US government securities. By virtue of buying US government debt they are foreign lenders. They are the financiers of the US economy (and West) via the current account. This recycling allows them to artificially stimulate their manufacturing exports even more as the Chinese are helping to stimulate American demand for Chinese goods.This whole relationship has been termed vendor financing and resulted in lower rate, more affordable mortgages. This relationship was more instrumental, by far, than the Clinton legislation passed for more affordable rates for less well-off Americans, which some apportion blame to for the subprime mess.
