If A Soft Man Turns Hard
It was sort of inevitable that President Obama would stop off in Singapore en-route China since it is the thrusting little state of the Far East that cannot be ignored (refer to Chapter 11 of Violets) as a microcosm of the China syndrome.
Ex President Bush played the hard man, ably backed by his Treasury Secretary of the time. They put the East/West trade imbalance on the line and blamed China openly for its currency hold-down in support of its exporters and worried openly about China’s purchase of stakes in mines in Africa and elsewhere to support its gargantuan appetite for commodities.
Then came a softer approach from the new administration. The two big powers needed to understand each other, needed to get closer together on economic thinking. The trouble is that China has continued to pump its money into the supply side by building more and more infrastructure: more manufacturing capacity. It has played with its worry beads about its external funds invested in the greenback and even threatened to invent its own world currency exchange.
The employment situation in the US is very grim and getting worse no matter the rate of unemployment may be steadying off.
What happens when the soft man turns hard? In my experience he can be harder than the upfront hard man. The US economy is still vastly greater than that of China. If President Obama closes the door for a year or two, China will be in the biggest mess the economic world has ever seen. If the students with their primed questions laugh at Obama like they did at Bush, watch the worm turn.
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