Yes, China is betting on the US continuing to buy $1T in their cheap goods. This is the juggling act Obama/Bernanke/Geithner is having with the Chinese. If the US cannot buy $1T in goods, then they will not continue to buy $1T in Treasuries and other assets. They will begin to dump. Obama is having Bernanke inflate the stock market so consumers believe they can begin spending again. This is a head-fake. Obama is trying to convince China the US is recovering enough for their satisfaction.
China is over produced and over stocked. They don't really care. They hope then that they could sell the stuff domestically. They could sustain such a policy for several years before their economy falters and slows with unemployment and more.
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Yes, China is betting on the US continuing to buy $1T in their cheap goods. This is the juggling act Obama/Bernanke/Geithner is having with the Chinese. If the US cannot buy $1T in goods, then they will not continue to buy $1T in Treasuries and other assets. They will begin to dump. Obama is having Bernanke inflate the stock market so consumers believe they can begin spending again. This is a head-fake. Obama is trying to convince China the US is recovering enough for their satisfaction.
Aug 10 19:23 pm
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All Comments by geewow »GDP Management, Chinese Style [View article]
China is over produced and over stocked. They don't really care. They hope then that they could sell the stuff domestically. They could sustain such a policy for several years before their economy falters and slows with unemployment and more.
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