Indeed the US is in quite the pickle ... the next phase of this entire debacle is to point fingers elsewhere as the cause of this complete travesty and for their ineffectual attempts at extricating themselves from it. The start of the next cold war is on and as I maintained last year China has little to gain by a currency appreciation while holding large quantities of the currency which will be worth less by such a move. Until the value of those assets is secured through some form of agreement I continue to maintain the yuan will remain pegged at current levels despite whatever accusations of unfair trade arise.

It makes no sense to choose on your own to devalue your own assets and change the policy of pegging which supported that reserve build up and at the same time giving US business access to a source of cheap labour for manufacturing to allow the US lifestyle of enormous consumption excess to continue.

During that time prudent fiscal policy would be to have charged a VAT to build a surplus for a rainy day. Now that the monsoon has arrived the cupboards are bare except for a jar which once contained the funds but now contains IOU's.

The problems are too large for a 4 year mandate to even begin to see the impacts of corrective action, indeed the pain will be great and enduring throughout that time.

Without political will to make the changes, the dire economic conditions will result in the need for the only government that can make the needed changes.

Sadly the American people have already lost control of the actions of their government ... prepare for the inevitable totalitarian state that accompanies economic and social breakdown.

orgy