“power inevitably will redistribute itself, and we will see more meetings like the U.S.-China Strategic and Economic Dialogue just concluded—where China knew it had really nothing it needed to “win” from the U.S. except a continuation of the status quo. Whatever one thinks about the ethics of Chinese investments in places like Sudan and Myanmar and North Korea, China’s posture at the annual U.S.-China summit makes it clear that, in China’s eyes at least, they see time as being firmly on their side.”Should the “continuation status quo” involve debt forgiveness (or the threat of default if they are unwilling) from China? After all, if they are not ready to consume and return the favor of stimulating American growth by employing American exporters, perhaps they will find it beneficial to forgive much of our debt, and let the status quo continue again. After all, they are concerned about political consequences from within if they can’t continue to bring employment to their masses. Or does America eventually just pay them back in freshly printed dollars?“RGE’s Outlook for global growth was predictably branded as “too bearish” by many. Yet now consensus is rapidly converging on our position. The EU, and particularly the eurozone members of the EU, is at risk of a double-dip recession. As that unfolds, it could turn out, ironically, that my economists and I were actually too optimistic. EZ (eurozone) woes are fueling risk aversion as investors fear that a liquidity squeeze and possibly a crunch could be around the corner. This would not just affect growth in the EZ but would likely result in a global slowdown consistent with our theme of a year of two halves.”Brings to mind this article:http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.htmlHere’s some history for us.Niall Ferguson: Fiscal Crises and Imperial Collapses – Peterson Institute

Significant idea. Would die to learn more about that.