This is a non story. I'm a european and I know this situation won't stick. We will continue to outstrip the us but we will in turn be outstripped by China. We are benefiting from the explosive groeth levels of eastern europe and have plans for further expansion. However this will pale in significance to the authority weilded by the chinese. The events of the last few weeks in tibet are a great demonstration of the shifting geopolitical landscape in these terms.

The west cannot discipline China at the moment because we know they are holding a shed load of dollars, euro and pounds. They would only have to release those onto the market and a small financial blip turns into 1929. In reply to some of the remarks being made on here though.

Ben Bernanke is not at fault. Not saying the word recession woun't prevent an inevitable recession it only prevents creating a recession. Thats just stupid. There will be a recession of some kinds given the tighter fiscal situation that will have to be imposed upon the us government. Secondly, government debt doesn't just affect the grand kids. It can cause serious restraints on borrowing in credit markets which at the minute is the last thing you need. It detracts from investment.

The only significant difference between the US and the EU economies is that we have a plan and diverse markets that may be able to react to the emerging markets. I'm not only talking about china either. There is significant growth in the likes of indonesia, Russia, India, South Africa, Brazil. They used to call them the bric's but now there are more than just four of them the list is endless.

The US trade defecit is a significant sign of the troubles ahead for the U.S. economy. The only economy that looks in similar problems in europe is the U.K (where I'm from). My advice is sell your dollars now because soon the saudis will.