Friday, September 5, 2008

The Real Threat From China?

The international economy is supposed to be a bright spot for US business. The New York Times today mentioned that the falling value of investments the United States has the Chinese central bank strapped for cash. The article does not mention the possibility that the bank might slack off its purchasers of US paper. Does anyone have any thoughts about how sensitive US interest rates might be to declining demand by the central bank? Even more important, how long can the unhealthy codependence of the US and Chinese economies last?

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