"Chimerica": Til Death Do US Part?

Dollar Shift: Chinese Pockets Filled as Americans’ Emptied  by Mark Landler from the New York Times reports on the seismic shift of wealth from the US going East - and a poor country lending to a rich one, turning logic on its head.  But the "Chimerica" marriage "for better or worse, til death do us part" with recycled US debt held by the Chinese as they continued to sell cheap goods is now threatened as the US consumers have backed off on cheap goods and with a global recession there are fewer places to hawk their goods and fewer options for entities to support the US gargantuan debt. 

In the past decade, China has invested upward of $1 trillion, mostly earnings from manufacturing exports, into American government bonds and government-backed mortgage debt. That has lowered interest rates and helped fuel a historic consumption binge and housing bubble in the United States.

China, some economists say, lulled American consumers, and their leaders, into complacency about their spendthrift ways.

“This was a blinking red light,” said Kenneth S. Rogoff, a professor of economics at Harvard and a former chief economist at the International Monetary Fund. “We should have reacted to it.”