In today’s news was a story that China is concerned that the U.S. is trying to make diplomatic alliances with its surrounding neighbors. Apparently there wasn’t a serious car wreck to talk about instead.
Like it or not we’re comfortably in bed it China, no matter what the politicians from both countries say. And I’m not talking about the U.S. debt China holds. That isn’t a problem. If China decided to cash in its bonds the Fed would just print money from thin air to buy them.
Chinese made consumer products are a different matter. If it wasn’t for Chinese made products, most everything we buy in this country would cost more – a lot more. If Chinese made products are banned or heavily taxed, our 3 year recession would turn into a deep depression as people discovered their money was buying 25 or 50% few goods than before.
In return, we are keeping the Chinese economy humming. They’re having a bad year in 2012 and only expect to grow at 7.6%. The good economy in China keeps the unrest that is bubbling under the surface from boiling over. Thus the government keeps itself in power.
All the arguments about tiny island ownership, fishing rights, and diplomatic alliances are basically b.s. made up by diplomats to make their jobs seem worthwhile.