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wishful thinking + advertising by US gov/business leaders

Actually as the US CA deficit was until recently larger than official financing of it, private investors must have believed as well in superior returns in the US. Otherwise the official inflows would have been accompangnied by private outflows, as it happens about since last summer, when the credit crisis became publicly aware.
This happens as well currently in the Euroarea, where private money flows largely out, while official money comes in.

I responded originally because it seemed you give the Chinese kind of a moral responsibility for the current situation in the US. Besides that the mercantilist policy has elevated hundreds of millions of Chinese out of poverty, this was an opportunity - a risky one, but still - to make large investments into the future with low interest rates and low inflation at the same time in the US. And it were not only private people who borrowed the money, but as well the gov, which obviously believes, that the future lies in a superior military. Without Chinese financing, the wars in Iraq and Afghanistan would be much more painful for the US tax payer. And to use this oppurtunity that way, was a decision made in the US, not in China.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Sun Jun 1st, 2008 at 06:34:18 PM EST
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