"The Federal Reserve allegedly held short-term interest rates too low for too long. From late 2001 to late 2004, the overnight Federal funds rate ws 2% or less. Credit was supposedly too easy.
The Chinese funneled huge export export surpluses mostly in dollars into US Treasury bonds. That kept long term interst rates low even after the Fed began raising short-term rates in 2004. China's foreign exdhange reserve, now exceed $1,3 trillion.
Mistakes and misdeeds do not occur in a vacuum. The ultimate culprit may be irrational exuberance." My comment: Life style of Americans must be noted! To get rich in a jiffy? US-China/Sino-US economic relations must be understood and not to be misunderstood. Francis Shieh on Wednesday, August 29, 2007.
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