Dysfunctional = China (Black Swan Capital)

Look up dysfunctional in the dictionary, you'll see a picture of China.

Now, it might be a bit different if we were privy to all the political theatre in the undisclosed meetings, discussions and deals between leaders of the two countries, but China did play an active and determined role in devoting so much of its FX reserves accumulation to US dollars. Why did they continue to make the same decisions to pile so much money into US debt? Because it made sense for them. [Them being the Chinese political elite who prefer backing Chinese production at all costs in order to prop up headline GDP.] Why did the US continue to borrow money? Because it made sense for them. [Them being the US political elite who prefer boosting US consumption at all costs in order to prop up headline GDP.] So my point is: damn right China has to worry ... but ...       Currency Currents 27 July 2011