[quote=ltokuda]One major concern I have about the US economy is the trade imbalance we have with China. A large part of the problem is that China pegs its currecy to the US dollar to keep its currency artificially low and give it an “unfair” trade advantage. However, one weapon the US seems to have against this is the printing press. In order for China to maintain the currency advantage, they will have to continuously buy more US treasuries. So it seems like we can run up the debt and effectively “force” China to buy it. This lets us export much of the inflationary effects to them. I’m not completely sure but I think this might actually work in our favor.[/quote]
You’re likely correct, as China started to see rampant inflation as of a few weeks ago, with everyday food prices increasing as much as 20, 30 or even over 100%. It was all over the news there. China IS paying for the economic sins of the US.
