PS, let me answer and let’s see if jepsd comes up with the same.
-Yes, they can lower interest rates to some extent using the slowing economy (falling asset prices) as an excuse.
-Yes, we will be fine ultimately, just have to work hard and enjoy very little for a while.
-Yes, they print the difference only. (Plus what the US prints I guess)
-It is currently a loss to China, since they could also give the printed money (or the exported product) to their citizens. It’s like lending a relative money (you don’t really expect it back, since he is a nice guy)
-When people expect bad times they will not buy, no matter how much money or incentive you give them, except they might buy for hoarding (e.g. gold). This was the Depression and Japan.
-China wants to stop at some point, but according to them doesn’t want to upset the system. So they take the loss to try and build a world-wide customer base, good political relations, a good banking system, infrastructure, etc.
