China vs USA and why it matters to us



Bernard Hickey looks at the key tension in the global economy right now: Amercia's need for China to keep buying its bonds and funding its recovery plan. If China stops buying or even starts selling its US$1 trillion of US assets then global interest rates will rise and the US dollar will fall.

Barack Obama seems to think "˜deficits don't matter' in a world where the US dollar is still the reserve currency. China might prove him wrong, and perhaps we should applaud the Chinese if they do.

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