TO JLRL:

Things are not so rosy indeed and it is not only because of China, I guess.

Even though, none of us come out with the ultimate truth (because there is not an ultimate truth on anything). This discussion is healthy, it helps us think as long as it is made with an open mind, intelligence, seriousness and respect for others' ideas. What I think it happened on this column somehow.

There has been so many other developments and things are unfolding so fast...On this topic yet, I just read this article: Why the Baltic Dry Index matters (from today at Alphaville: http://ftalphaville.ft.com/blog/2008/01/30/10578/why-the-baltic-dry-index-matters/?source=rss found it interesting for reflection. I guess that that everyone's question is: how long this will last and how it will affect the real economy, it has not already?

I hope that despite all the acuteness of the situation, it is does not weaken your mind because there is a shortage of cleverness in US  (take it easy, please!) .Thanks for the kind treatment…milord. An American Lord! What a find!

"As a rule, adversity reveals genius and prosperity hides it" (Horace)

To CRISTINA

Sorry I'm late replying, Cristina... I must be too busy with everything Chinese; this is a new disease I suffer from. It has become so much more acute since I last returned from China...

I am so glad you read Parag Khanna' article, in the New York Times Magazine! What a pleasant surprise!

I could not agree with you more and do share your enthusiasm: his is the most outstanding piece I have come across in years, in the American media, on the configuration of our nascent multipolar world. What a visionary that Parag Khanna is! I can't wait to read his book, when it appears, next March. I have even recommended that our local library purchases it...

:) A quote for you, from the great Lao Tzu: "It is Heaven's Way to conquer without striving."

Wishing you well, milady...

To JLRL:

Now, if one asks me my citizenship, I'll borrow on Mr Kanna's terminology: I am citizen from the Second World even though we got so used to refer to the First and Third World (in reference to the classification) that we all forgot what would make up the Second! and that was such a long time ago! Well, well...here is the Second World Presented by Mr. Kanna redressed and redesigned and ready to be to be on the map, this time visibly!

To JLRL:

I have had troubles with the Internet connection + my busy-busy scheduled...But today I took a look at the information on FDI. I took the trouble to charted it on excel. There I found it even more impressive! Astonishing.

Strange thing is that it reminded me of some Chinese mates I had. When China was chosen for the Olympic games this year, I could barely believe their happiness. They eagerly would wait for 2008 to come so that they could show the world what was China about. They held so much hope, it was touching because at that time, China wasn't at the Geopolitical map...yet! Not yet. Then in 2004, I commented with one of them, chatting as we used to, that China would rise up soon to become an important global player. I had no idea of what was to come, neither this person, who smiled timidly to me as if I were saying something nonsense, or as if just trying to plese her with some diplomatically or politically correct (a mate policy) But I didn't. I felt that way because it was when I started (I wrote that here on post global at Miriam Leitao column - about since when I started noticing a change in place, going on unannounced, virtually unplanned to be so)noticing some big was on the move. Just could not figure out what exactly. I wrote that here on Post Global. It is sort of rewarding at a personal level that I haven't been so misled or deceived by my own thoughts and wonders.

I recommend you to read (if you hadn't yet) a fantastic article on NYT by Parag Khanna http://www.nytimes.com/2008/01/27/magazine/27world-t.html?pagewanted=1&_r=1&ref=magazine

I read it and I was impressed! What a mind, what capacity! I commend his wisdom and wit comments. I think alike.

Quote of the day :-)

" Civilization, in the real sense of the term, consists not in the multiplication but in the deliberate and voluntary reduction of wants." (Mohandas Gandhi)

"No culture can live if it attempts to be exclusive." (Mohandas Gandhi)

In spite of the US still the major consumer of all goods produced in the global market - amounting to almost 30% in the share - the current growth in various emerging economies is not entirely dependent on the growth in the US markets. These emerging economies are also the emerging markets in themselves as their own economic index is improving rapidly with domestic consumerism on tremendous rise, driving their overall growth. Therefore, it is not about only the US anymore.

When the economic consequences of Vietnam hit home we’d been at war for around 8 years. Our national debt combined with the birth of OPEC (who immediately made its mark on the world by a series of price doubling increases for oil) with the consequence of crippling the nation. It was then and there that had real national security been a concern of the so-called “conservative” forces in the US that the Oil Industry ought to have been nationalized, because it was from that point in time onwards that we no longer controlled the oil business. Control was now completely in the hands of foreign states while the oil itself was crucial to the functioning of the nation—we were now slaves to these nations and we have apparently become suicidal slaves at that. The Iraq War is the failure of those who claim they defend the interests of the nation because it is a war that only serves the interests of oil producing nations while it weakens the US, our key trading partners and our allies. The decision to go to war is a direct reflection of the ignorance that leads the nation.

A key consequence from our war debt in Vietnam was the collapse of the Breton Woods exchange system that gave rise to a more or less fixed rate currency exchange regime. Peculiarly the difference between a fixed and floating currency exchange regime is as much political in nature as it is economical—because this system of exchange defines what is really possible in economic policy. In a world of fixed exchange rates a central bank attempts to maintain fixed rates of exchange between themselves and its trading partners because this allows the use of an effective fiscal policy and thereby rule a country by means of Keynesian styled economics. The key incentive of this system was to encourage economic acumen because the freedom opened to policy makers via Keynesian economics was contingent upon a nation actually maintaining control over their finance policy that could be defended against open market operators who would continuously test each nation’s exchange rate (buying and selling currencies)—if a country failed to successfully defend their position against the fixed rate the country’s currency would then float and they would be forced to manage the affairs of state by a different form of political philosophy—because once their credibility is destroyed the currency floats and fiscal policy becomes ineffective.

By 1988 the consequences of Reaganomics had kicked in. The world economic system basically collapsed thanks to the black hole deficit of Reaganomics and in place of the more or less fixed exchange rate system the so called floating or flexible exchange rate system came into play. Here the central bank’s role is changed. Taxes and government spending become ineffective and what are used to manipulate domestic policy are the interest rates and the supply of money. The politics of a nation are forced to avoid the use of government spending (it is necessary to have complete balance in the budget because budget imbalance is reflected immediately through the exchange rate (because it floats) hence a budget deficit results immediately in the weakening of the country’s currency—Keynesian styled economics is dropped and it is the market that rules the nation. With the Bush administration the effect of deficit spending is most clearly seen with the dollar that went from a position of 90 cents to a Euro in 2001 and today we are at 1.48$ dollars to a Euro—our purchasing power in relation to the Euro has been halved, but for countries that receive a major source of their revenues in the form of the dollar, in particular oil producing nations, then a decline in the value of the dollar means they must raise the price of oil to maintain a constant level of purchasing power, hence of devaluation in the dollar means an increase in the price of oil. The major consequence of the floating system is that it forces nations towards classical notions of money supply (quantity of money). With Reagan it required around 8 years before his black hole style of economics failed and like the collapse of Breton Woods, it took the world with it. Today with George W. Bush we have again achieved systemic collapse because of no restraints. In terms of our history we have obviously learned nothing. Not in terms of starting wars on fictive grounds—Vietnam was also started on fictions and we have learned nothing from black hole economics.

The problem is that we have now used up all known economical systems—each one destroyed by a Republican president. Even when we go back in time to Calvin Coolidge’s laissez faire we meet that same sweet Republican disaster in the financial realm while they seem to always discover some “evil” to be conquered—with Coolidge it was “King Alcohol” and prohibition, with McCarthyism is was “get the commie” and today we are strangled by the Bush war on terrorism. With Coolidge it also required around 8 years before he destroyed the country.
Maybe this is nothing more than crazy eights or perhaps there is a direct correlation between Republican economic policy and economic mayhem (It requires a Republican exactly 8 years to destroy an economic system). Personally I don’t think the economy gives a hoot about ideology unless you attempt to steer the economy by dogma—sometimes the economy needs liberalism a la Keynes and other times it needs classical solutions via wage-labor or expanding the supply of money, sometimes you must increase taxes, sometimes you must cut them, sometimes you must raise the interest rate and sometimes the government must bail people out of hard times and sometimes you need combinations of theses all according to what’s happening here and in the global economy. The inflexible dogma of republicans is perhaps a disaster when it comes to economic decision making because it might not be in line with the party dogma of what constitutes being “conservative”—thus they probably should never be allowed to be in the White House more than 4 years or else you can bet with 100% certainty on an economical disaster. This trend for economic disaster has been the case since 1922. During Ike’s presidency we avoided economic mayhem but suffered from the republican ideological delirium of McCarthyism instead—that delirium still controls the “conservative” base.

Republicans are basically nothing more than an elite party of greedy dogmatist—much like Red Communist who served their party propaganda via the Pravda; with the Red Republicans you get FOX News—meaning it ain’t news its propaganda. Basically the party message is those outside of the party elite are expendable dogs—in particular your rights and especially those rights that concern the pursuit of happiness. For them happiness is watching you suffer. It is the chuckling sense of power they feel from blaming you, the American people, for desiring to bring the Iraq War to a halt because it serves no purpose and weakens the nation. Because you desire accountability they call you cowards. Because you’re tired of your kids getting killed to please the board of trustees at Standard Oil—they say you lack staying power when the truth is the average American can’t make ends meet and this is reflected via the national accounting statistics for household savings, which presently stand in minus—today there are no household savings in the US—hence the reason the country can’t consume its way out of the economic crunch is not for lack of will or desire but because “they ain’t got no bread, man. “

The motto of the Republican Party reminds me of the story surrounding the statement made by Marie Antoinette when it was brought to her attention that the people of France had no bread to eat and she retorted, “Then let them eat cake”!

REFLEXÕES SOBRE 2007 E PARA 2008

Como somos um país de dimensão continental, correspondendo a 15 vezes a área territorial da França, 34 vezes da Inglaterra, 23 vezes da Alemanha, 22 vezes do Japão ou 28 vezes da Itália, temos problemas que eles já superaram . Mas os países citados, estão no grupo das oito maiores economias do mundo e não apresentam nenhum desigualdade entre regiões ou no PIB per capita e que está acima de USA 30 mil. E esses países, mais os Estados Unidos, China, Rússia, Canadá, Índia, Espanha e também o Brasil, respondem por mais de 80% do PIB mundial. Isso prova que existe uma desigualdade muito gritante entre as 20 nações mais ricas e as 136 nações mais pobres.

Classificaram o nosso País, como a Quinta maior população mundial, com 22 habitantes por quilometro quadrado; o Sétimo maior PIB mundial ou o Sexto pelo RPC (paridade do poder de compra) e como a Sétima maior reserva internacional e a Sexta maior força de trabalho. E a nossa dívida externa , em relação ao PIB, não passa de 11%, enquanto ela representa para os Estados Unidos, 80%, para a Inglaterra, 335%, para a Alemanha, 151%, para a França, 185%, para a Itália, 113%, para a Suiça, 326%, para o Japão 37% e, para a Holanda, 27%. Teoricamente estamos em uma situação muito privilegiada em relação ao resto do mundo. Mas esqueceram de esclarecer, que todas essas riquezas que levaram o país ao seleto clube do G-20, estão praticamente localizadas nas regiões sul e sudeste, que concentram 55% da população brasileira, 70% do PIB e ocupa somente 18% de nossa área territorial total, mostrando, com clareza, que temos dois Brazis.

E as regiões norte, nordeste e centro oeste, ocupando 82% do território nacional, apresentam um PIB maior, tendo em vista a inclusão de Brasilia. Mesmo assim, na média, não passa de US$ 5.000 ou seja, 30% da renda per capita do sul e sudeste.

Diante de tantas informações positivas, acrescentamos ainda o aumento nos empregos formais, o crescimento de 11% nas receitas administradas do Tesouro Nacional, na capacidade de compra e de endividamento dos brasileiros, mesmo pagando os juros mais absurdos do mundo, a auto suficiência em petróleo e a redução da pobreza e das desigualdades regiões, em decorrencia dos programas sociais de Governo. E esses números estão fazendo com que o governo mantenha um volume desnecessário de reservas internacionais (pagando elevados encargos) e não amortize dívidas, pense em Fundo Soberano (um luxo de países que tem sobras de caixa e não sacrificam as prioridades internas) e , mais ainda, em oferecer linhas de créditos, através dos Bancos de Fomento ( BB, Caixa, BNDES e outros) para o financiamento e compra de empresas , no estrangeiro, mantendo, lá, a garantia de emprego, renda e consumo, Tudo isso está acontecendo, porque o governo deixou de fazer completos raios X do Brasil, de norte a sul e de leste a oeste.

Com toda essa euforia, as estatísticas e os raios X nos mostram um Brasil real, que tem 52% de eleitores semi-analfabetos e 8% totalmente analfabetos, 50% de todas as riquezas nacionais (PIB) concentradas em somente 1% ( hum por cento) da população , nível de desemprego acima de 9% e ainda com 20 milhões de pessoas em estado de pobreza quase absoluta. Portanto, não é a hora do Brasil financiar o deficit americano (com as reservas internacionais), a aquisição e instalação de empresa no exterior e de criar facilidades para o capital volátil, mantendo, uma Selic que agride as contas do Tesouro em mais de R$ 30 bilhões anualmente, considerando uma Taxa de 9% ao ano e ainda 100% acima da inflação (uma das maiores do mundo). Devemos encarar, ainda, que no orçamento do pobre, os ítens escola e alimentação pesam muito, porque faltam estabelecimentos de ensino gratuítos de qualidade e o plantio de produtos que possam manter o equilibrio entre a oferta e a procura.

A prioridade que o brasileiro espera e cobra, não está relacionada com a transferência de recursos gerados pelo seu suor, para a manutenção do desenvolvimento dos países ricos, mas sim, visando a solução para os inúmeros problemas internos. E não é concebível que o Brasil, com área arável de 5% do seu territorio ou de 200 milhões de hectares, produza , em grãos, pouco mais de 45% do que os americanos colhem somente em toneladas de milho e que corresponde ao porcentual de 50% da produção mundial. Em 2008, a produção prevista será de pouco mais de 135 milhões de toneladas ( utilizando 50 milhões de hectares), concentradas na soja ( 58 milhões), no milho (53 milhões). no arroz ( 11 milhões ) e no feijão (3,5 milhões). É muito pouco, no contexto de uma produção mundial de dois (2) bilhões de toneladas e aquí temos clima tropical, subtropical, com estações bem distintas, além do governo ainda gastar bilhões de reais com projetos de irrigação. Não há justificativa nenhuma para que o alimento e a escola e até o lazer, tenham um peso tão forte nos índices inflacionários. Falta ao governo elencar e materializar as verdadeiras prioridades do País e administrar, com rigor, os recursos disponibilizados pelo erário. E além dos problemas na educação e na produção de alimentos, falta ao Brasil recursos para a construção de usinas hidroelétricas e de eclusas, para um melhor aproveitamento do transporte fluvial; falta a construção de ferrovias de norte a sul, leste a oeste , para facilitar e baratear o escoamento da produção e o transporte de passageiros; falta infra estrutura de portos e aeroportos; falta a conservação e mais rodovias de qualidade; falta saneamento básico; falta habitação popular e faltam recursos,mas com bom e honesto gerenciamento, na área de saúde. Se faltam tantos recursos para agilizar o nosso desenvolvimento, proporcionando mais emprego, renda , consumo e melhor qualidade de vida para o brasil subdesenvolvido e desenvolvido, porque então proporcionar o conforto lá fora, quando aquí não produzimos alimentos suficientes para alimentar os 185 milhões de brasileiros e não temos escolas de qualidade e gratúitas para matricular os jovens de hoje, para não ser tornar os analfabetos de amanhã. Somos abençados por Deus para cuidar da melhoria das condições de vida de todos os brasileiros e não dos estrangeiros e AINDA FALTARAM MAIS DE R$ 50 BILHÕES PARA COMPLETAR O PAGAMENTO DOS JUROS SOBRE A DÍVIDA E DEVIDOS EM 2007 E QUE ESTÃO SENDO TRANSFERIDOS PARA A CONTA DO PRINCIPAL.

E os brasileiros cobram ainda do Governo, uma prestação de Contas bem Transparente e analítica e diária de todos os órgãos da administração pública direta e indireta (principalmente do BC e do BNDES), via Internet e não só a publicidade das receitas administradas. A contra partida é muito pequena em relação aos R$ 600 bilhões arrecadados em 2007. Caixa Preta com o dinheiro do Povo, não pode existir, em nome de qualquer sigilo, para acobertar irregularidades. O Governo deve contar com o povo e com os Internautas , para a fiscalização de suas Contas.

Panicky deputy sheriff of the Fed, Barney Bernanke,
thought that he was going to be a hero with his one week early extra large rate cut, but, now that the story of the French bank unwinding its positions and thereby causing much of last Mondays global financial markets meltdown has come to light, Bernanke looks like a panicky fool.

Sounds like the government and the corporation are working together on this...I'm not a conspiracy theorist..Not that there's anything wrong with that!
>>>>>>>>>>>>>>>>>>>>>
There is not likely conspiracies but there are obvious and open relationships between the two since, as once stated, the business of America IS business. You are not going to see mention of the FED in our Constitution. I guess it all falls under the "general welfare" part.
Back to topic, I would accuse our government of failing to recognize and act on the opportunity costs we are suffering because of energy policies. Part of our economic malaise is the cost of energy. I guess some can argue in retrospect that Bush/Cheney and the rubberstamp boys in Congress have favored fossil fuels because that is where 99%+ of the money goes. You ask any informed American and they will tell you that we were not ready for domestic renewable energy R&D and production. But, like 80%+ believing in WMD , this wasn't true. We were ready and would, at this date, been well along the path of conversion if we just did it. Germany is doing it and we would have been much farther along than them.
We didn't seize the moment, we sequestered it, we denied it, we diverted it (h2 economy distraction) and we lied about it. We BELIEVED we couldn't do it and that was the most un-American conspiracy of all.

Thats right keep telling more untruths, there is nothing wrong here, move along. What a Jack-donkey you are.

The bailout as I see it is not really to help the U.S. consumer, but rather the business' here in our America and abroad in nations that export consumer goods to us, particularly China. Go figure! ( And while you're at it learn the lyrics to Happy Days Are Her Again...)

To JLRL:

I found the table, just need sometime to read about it. whatever input I get from it, I'll return to you and might help too...no quotes today :)..too busy!

To JLRL:

Thank you very much for the PDF file, which I will read thoroughly later on.

If you read my previous comments, you may notice that I have worried with exactly that: US has ONE country (perhaps!) two in its focal vision that are China (for sure) and India, but this one more palatable and easier to make political and strategic inroads. While China...

My concern is that the US keeps its focus on China only (or mostly). If US centres its efforts on China it risks losing perspective (the peripheral vision :). It's may become an immediate response that society may absorb without much understanding. In my opinion, losing that vision is not good at this moment and start finding a scapegoat is ineffective now. It is so difficult to make myself clear when English is not my first language and this should be as short and concise as possible...Example: it's like me writing to you. Whatever I type here, I will have the firm idea that this chat is between you and me only. I forget (or force myself to forget otherwise I would not participate here) that hundreds, if not thousand of persons might be reading me, us. The blog after all. That is why I questioned about "other" countries, to keep it clear to me that are other countries beyond China, India...eventually Russia and Brazil (dragging, not only lagging behind). Other countries do face different and sometimes adverse circumstances, whether they are political, cultural, and/or economic. If their economies are based on exports, or if they depend of FDI (and that is why my question)then, here is the reason for my questioning, which I feel good for the analyses I could read so far.

Thank you once more for the PDF.

The problem is the value of the dollar. Foreign investors are buying US stocks at bargain prices because the dollar is worth so little. That is causing unjustified rallies in the US markets. We become complacent when our markets are strong. Our economy is weak and will continue that way until our dollar value rises. Oil prices and other materials we import are taking a toll on our economy because the dollar is so weak we are overpaying for all imports.

That was very thoroughly explained and in language a layman can understand ,something of interest is how our government works to stabilize and support puppet governments so that our corporations can set up shop there..pay wages that are ridiculously low ,just short of slave labor....and take jobs away from theU.S..Sounds like the government and the corporation are working together on this...I'm not a conspiracy theorist..Not that there's anything wrong with that!

Bill:
There are a couple of things that you're not addresing and I think are fundamental for this discussion. One is the global inflated real estate prices and the other is the credit crunch facing major banks (as a result of buying secutirized instruments). Again, it's incomprehensible how these issues were overlooked in the U.S. by financial wizards and especially Ben Bernanke, the same scenario now applies worlwide. Bottom line, even if the GDP accounting for exports to the US is minimal, countries face the same underlying structural problems the US has. It's not going to be a soft landing, any bets on my assumption?

Yonkers, New York
25 January 2008

No, Mr. Emmot, America is not having just a cold. It already has bronchitis which has all the appearance of turning into pneumonia shortly.

Ben Bernanke, rather panicky, has just cut the Feds rate by a whopping 75 basis points, something the Feds very rarely does. The Feds rate is now down to 3.5%.

What does this mean?

Clearly it means that the US economy is in very serious trouble and needed that kind of a hefty shot in the arm. But that won't be the end of it. As the US economy continues to spiral downward, expect the Feds to cut its rate still more, probably by 50 basis points step by step till the rate hits near bottom at 1% and even 0%.

At 0%, the Feds can go down no further. It can only maintain that zero rate indefinitely.

George W and Treasury Secretary Henry Paulson have just proposed a $150-billion economic rescue package to "stimulate" a $13-trillion economy which is now going through "a time of troubles."
That, again, is a clear indication of how bad the US economy is now--and of course how bad its near prospects are.

But a $150-billion economic "stimulus" (I call it "rescue") package is but a drop in a $13-trillion economy. If the White House and the Congress reach agreement on this package, and the cash reaches the millions of intended beneficiaries, including small businesses, quickly, yes, it will give a filip to the US economy--but only minimally and temporarily I am afraid.

When the temporary stimulative effect to the economy peters out, and it is bound to do so rather quickly, what then?

That is the question.

Mariano Patalinjug
Yonkers, New York

MarPatalinjug@aol.com

No offence, but the sage and best advice came to us from old generation, what we term the baby boomers. They were kind to us I would say. This is then the progress of today. May be we term this as the birth quake. When you watch the National Geography channel, “The Mega Structures”, there is a clip of the Phoenix. How the thousands of the slaves then toiled with little water supported with the community by the women folks, wives bringing the water in the hot dry barren land of Egypt to see the whim of the Pharaohs to save his life in future heaven of untold destination safe. It is amazing what the wives could and can do. I stop here. I said could and can. To look at the similar issue, I take you back to India, where the parents ask the priest to match the stars of the boy and the girl, and then decide if the marriage is an omen or a curse. I will take you to the land where in the East where out of hunger the girl is married to the boy whether they like one another or not. No I am not stating these marriages in bliss. See the taboo of the friends who pledge and bind their friendship by marrying one’s boy to the other’s girl to keep the friendship tied for centuries. The scientists would step in and talk of the genes carried by the same blood infused into the same system for years, but nay, all defy this. Today this India is the booming economy and so is China. Have you at anytime wondered if the manpower has given them the income that have now. Is it the marriages that cerate the wealth?
I have no idea but from the above and the Movie, “Spartacus” where the Romans fought the lions, the words are,” go for the shouts from the auditorium. We need quantity not quality. The quality will follow.
In IT, the we have, RIRO and GIGO. Rubbish in Rubbish out or garbage. Then there is a not that follows. Love is blind. Johnny is love. Therefore Johnny is blind. Is the AI and the logic?

A man in love is incomplete until he is married. Then he's finished.
Zsa Zsa Gabor

Conrad Hilton was very generous to me in the divorce settlement. He gave me 5000 Gideon Bibles.
Zsa Zsa Gabor

Getting divorced just because you don't love a man is almost as silly as getting married just because you do.
Zsa Zsa Gabor

He taught me housekeeping; when I divorce I keep the house.
Zsa Zsa Gabor
Sir
The year in 2008 hath just started. Is it not too early to talk of 2008? The reason I ask is the IT and the income of ours go hand in hand. If I have the cash I buy the latest and ask the Sony, HP, Samsung, Nokia, Apple, IBM, etc to keep on producing more. As the economy is gloomy, 2008 sees only the games and the animation of wars movies in demand. Is that what we want? Our kids are already carrying guns and they do not listen to the tutors or the padres. The raping and the killing go daily into the files that have the prison filled up to the brink of nostalgic.
I would love to have us go to the moon and further before the global warming hits us, but I do no not want to leave the mother Earth m the only planet that has chocolates aside
To me the best news in 2008 is the magazine ECONOMIST form UK gives me the best of the video on demand and the news daily. Gone are the days where the noble character, sombre, stiff-necked Dick Tracy with the hat gone come the open arms to us. Blog blog. I find this a much open asset then any gadget that has ever come into the market. The, You-tube is fantastic. The sources of all types of news are the table. I think that is the best I can have.
The BIG change is already in the wind. It contains oxygen. Seen many countries running for the biofuel or biogas?
I thank you
Firozali A Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salam
Tanzania
East Africa

The first intelligent analysis of the decoupling issue. Mr Emmott left out of his analysis that the % of exports to the USA by China are decreasing as exports to other areas are increasing. Nor had Mr. Emmott indicated that OPEC LAND primarily imports form Europe and the Far East, rather then the USA, thus the ones with $$$ [OPEC, Russia, China, Japan, Taiwan, etc] can keep internatioal trade growing for the simple fact that they have needs, desires and money [where $$$ is what Uncle Sam lacks].

a very sensible article. a welcome change.

Cristina, you write: "I think that the American economy still matters to other countries because many foreign economies depend on foreign investment, direct investment is eagerly desired."

If you will allow me, Cristina... you may want to have a look at the CRS Report for Congress, "China's Trade with the United States and the World", updated January 4, 2007. (1) -- I have not found and do not know of any more recent document on the subject.

In it, Table 18 (page 54) gives "China's Utilized Foreign Direct Investment Inflows, Top Foreign Investors, 2001-2005".

Personally, I found the American contribution to have been much less significant than I would have assumed it to have been, during those 5 years.

See, I must have been influenced more than I thought by the headlines that continue to appear in the US media. Unless it had more to do with how the questions are put to us by PostGlobal...

(1)

http://china.usc.edu/App_Images//crs-china-trade-07.pdf

Citibank, Merril Lynch.. hmm the same company cplayers that busted during the Reagan Revolution..

This time for even more BILLIONS...

ISSA

To Joao Marcos:

Joao Marcos: yours and Bill's analyses established a balanced view on the current situation. It is very nice when we have the opportunity to get informed like this. It is rare and unique. You both were serious and treated the other readers with due respect by giving them a great reading through your comments.

Bill there is so much you don't understand - read Chapter 6 of Lester Thurow's book - Fortune Favors the Bold - we lays out the problem quite well - suffice to say a lot of people don't understand the problem either but now is a good time to get informed.

US is still the world's largest consumer and the keeper of the worlds currency standard.

Any problem in it is sure to be spread, because of the multiplication factor (i.e. US buys from China, India, Russia and Brazil, which in turn buy amongst themselves and from other countries, and so on and so forth).

Also.. apart from the hard economics, the fact that the global financial markets are all intertwined, means a bigger flow of cash back and forth.

The fact that Citibank, Merril Lynch and others burst their sub-prime bubble, means they will sell assets to cover their short positions. These assets are mainly in developing countries, which mean a loss of dolar and devaluation of their own stock markets.

Any sniffle in the US still mean a big problem worldwide.

Great article and fine analysis! No wonder! I entirely agree with your analysis of origins of "other's getting a cold". Congratulations for your clear, simple and objective analysis.

However, I think that the American economy still matters to other countries because many foreign economies depend on foreign investment, direct investment is eagerly desired. I wish you could write about this too. You mentioned China...but what about the others? I just would like to hear more from you, to learn.