James Fallows is the author. His blog: Jamesfallows.theatlantic.com
The 1.4 trillion question. Our risky debt to China on pages 36 sqq.
Stephen Schwarzman's perceived offense is greed. He is the CEO of Blackstone Group with 3 billion of China's national savings into the IPO of America's best known private equity firm. Laobaixing(Pin Yin for ordinary folks) in China and everyone in the US gave to the crony of the President at Yale.
Page 48: Without China's billion dollars a day, the US could not keep its economy stable or spare the $ from collapse. China has mostly parked in US Treasury notes. In effect,every person in the US has the past 10 years or so borrowed about $4,000 from someone in the People's Bank of China,the central bank as the FED in the USA.
Page 44: Spent at CVS passed to Oral-B, paid to the factory, surendered to PBC, then bid at auction for Treasury Notes our dollar. My comment: Official Government Papers with confidence guaranteed by faith and credit of US Government is safe investment for all. China has issued papers as well. Government securities are safe because they are backed by the governments of USA and China. My overall review of such a feature article: The article has details with insights but the view of the writer presents negative scenarios apropos of Taiwan and other issues between the USA and China. I wish to remind readers that someone said:"It is the Economy,Stupid!" Economics is the top priority of a nation in the macro view but it is also a top priority of individuals(Micro) for all folks on earth. I am inclined to be optimistic about Sino-American Economics by virtue of mutual benefit as a lifelong student of economics. I pointed out in "Work and Study Cycle Theory" that both USA and China must work together for humankind in the 21st century in economics. That means problems can be solved by decision makers when they are aware of the needs of USA and China. Globalization requires the study of language and philosophy for true understanding of human behavior for economic and social benefit i.e. Socio-economics for the wellbeing of society per se. Any negative scenarios would not be in the best interest of the peoples of USA and China plus folks in the world with high tech and nuclear realities. I would opt for the positive rather than the negative for homesapiens in the days to come. Economics are in the headlines in USA and in China as well. Francis Shieh a.k.a.Xie Shihao. January 11, 2008