China has a whole new game plan.We are king of the hill and they are.
China just started the decoupling process. She plans to fade away from the US dollar slowly. It is basically a business decision. With escalating federal deficits, it does not take a financial genius to figure out the US cannot pay back their debts. It would be foolish for China to hold onto US dollars. China will start by not buying long term US treasuries, but buy only short term treasuries. They cannot let the US collapse without hurting their T bill holdings. Second they use their huge cash reserve for the rainy day to keep her population reasonably employed by making more products usually reserved for export to meet the pent up consumer desires of their rural farmers. The boom is similar to the US boom after World War II as the pent up demands for consumer items (rationed during the war) are available. This rural consumer boom is temporary as China re orientates her export market to Brazil, India, the former Turkish Soviet republics and Russia as her alternative replacement markets of the US. China does not have to replace the US market completely, she needs to replace enough of it with alternative export markets to meet her minimum growth rate to keep most of her population employed. China will shed the economic ties with the US gradually. What is our big government politicians going to do, when China procurement of US T bills fade away slowly??? Inflation or high taxation. Either will kill the US economy. My advice to the feds is immediately stop immigration, and cut down the size of government to free up what is left of private capital for business, or else we will drown in taxes and escalating social welfare programs.