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Exactly! If you ran it from 1970 it would show that there is nothing to panic from at all. China has to unpeg but it will be a disaster for them. It is really a bubble, but no one want ot admit it. One year of US tariffs and it is over.

The dollar will do just fine, BTW. Bush is just ending the gravy train. Again, for globalism to work Japan, the EU and China have to develop internal demand and let every one in. If not, then sooner or later the USA has to stop being the market of the world and shut the door. Nothing could be more simple. All of this grousing about twin deficits is just a smokescreen to mask the failure of these other economies to generate growth. The real problem is that nnternal growth is accomplished though great domestic economic freedom and that translates into greater political freedom for "the masses." And none of the power elites in any of those blocks desires that.

The US will be just fine, provided we get the sort of domestic reforms that Bush is talking about.

In truth, the monetary policies of the USA during the clinton administration waresetup to help EUrope and Asia, not the generat US population (preparing us for "globalization" dontchknow.) That is being corrected now.

Instead of bitching about "twin deficits" the rest of the world needs to build internal demand. But they are not set up for it, they are set up for predatory import/export relationships with the US.

China came out with growth figures today. I do not believe them. It is a ponzi scheme ready to collapse. Great pressures need to be brought to bear on China to go through a series of repeggings. I doubt it will happen but it should be one of the highest prioities on the Hill.