Imagine how many newsletters Bill Bonner will be able to sell this weekend by scaring the shit out of the people on the Agora mailing list.
Yes, China can and will find a way out of their predicament lest Plaza Accord II is foisted upon them, but who will buy the Treasury Bonds if the Chinese slow down? As they say in economics, a new equilibrium will be found. We can already hear the giant sucking sound of money leaving emerging markets in the form of a financing shortfall to the tune of up to $700 billion.
U.S. investors will also step up to fill the void. Americans are responding to a decline in household wealth by increasing their personal savings like squirrels socking away nuts for winter.