Did you happen to notice the headlines over some comments made by China regarding their concern about American Government Debt Levels? I would have missed this one entirely amongst the general angst about our current deficit spending and concern that China might not keep buying our bonds as they have been. That is until President Obama himself felt he had to address the comments directly and essentially immediately. This reaction in itself tells me that something is wrong in Dodge, or America in this case.
When your top banker expresses concern about debt levels and you immediately jump on the comments everyone should stand up and take notice - you are desperate. I am scratching my head wondering why the markets only hiccuped and then moved on. I think China accomplished more then they could have hoped for and have clearly shown their power in the world has risen while America's tanks are running on empty.
America is not weak physically and enjoys a lot of residual goodwill around the globe as economically solid but China just showed it could bring America and the rest of the world to its knees simply by reducing or eliminating its holdings in American Government Debt. Historians will look back and determine that the balance of power has officially shifted.
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