US and China | Decoupling | Where? Not Here

Current account economics says the US & China are still joined at the hip?

[Editors Note: We have made an effort to push our China report so we have focused very much on China this week; it doesn't mean we are looking past the ugliness that is the US economy, but that ugliness here, especially as it relates to falling consumer demand, is adding increasing pressure on China at just the wrong time.] Yesterday I wrote to a reader in regards to a question from him as to why Western leaders continue to let China suppress the value of its currency for competitive trade advantage. He wrote: "I really doubt any Western leaders will have the balls to do this. Where is Maggie Thatcher when you need her?" Well, I do miss Maggie Thatcher. I thought she was great and am not looking forward to Hollywood's most likely "liberal revisionist history" of her life. I have two responses to the questions, one a bit of a rant but with what I believe are many kernels of truth and the other is about the basic balancing of global current account surpluses --          Currency Currents 29 July 2011