China Men!

Well, it is time I tackle some other economic issue than Germany. The next best one is the rise of a sleepy giant, China. Slowly but surely the under par peg of the Chinese currency to other important ones resulted in the huge accumulation of foreign reserves in China and Asia in general has become your neighbor US lending fascility. Wouldn't you know it you may find it strange to think that much of the US deficit is coupeled to the enormous economic growth in China.


Here is a nice blog article on the topic China and US economy:
http://www.roubiniglobal.com/archives/2005/05/global_imbalanc.html
(title of this blog entry is the link to it, I still have to find out to insert links into the window)

Korea has show its teeth by simply threatening to sell of some of the US treasury bill it holds in its reserves and look what happened to the dollar that day!

This might become an interesting decade, if or when we find the first real US currency crisis. The dollar is not unfailable and the Euro is coming up as a strong alternative currency, not only economically, but with US oil policy pressing OPEC it might find one day that oil trade should occur in Euros and the geopolitical reasons make Europe the better, more stable ally.
Even the Chinese currency could one day after pegging is over be a remarkable milestone in the world economy.