Originally Posted by Truth-Bringer

LOL. Pay no attention to the man behind the curtain...

Originally Posted by B-rett

The US still has the largest GDP of any country, the EU is a collection of over a dozen different nations economy

Originally Posted by politicalnomad

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.

Originally Posted by JLB

So are you saying that the EU is one nation?

Originally Posted by JLB

So are you saying that the EU is one nation?

Originally Posted by B L Zeebub

It is not the Saudis, it is the massive $ bond reserves that the Chinese have, if they dump them, the $ will be as much use as "tits on a bull".

The other prob is that they have no culture of saving in bldg soc, investment bank accounts ect like us, so they have to borrow externally.

Originally Posted by B L Zeebub

about as much or as little as the north and south of your nation!

Originally Posted by Truth-Bringer

You need to work on your reading comprehension.

Originally Posted by politicalnomad

Yeah too true. The fear comes when the chinese start using that as real political leverage in a situation such as the protests in tibet. I just meant that the movement of saudis to a more stable currency with a bigger market can't be far away (couple of years yet though) and that will be a bit of a landmark.

I disagree however that there is a lack of chinese saving there MPS is actually higeher than the wests at the minute but you are right in that there are no major chinese national banks that could provide the kind of borrowing needed for their growth rates. I wouldn't call this a problem though as lending to China is problably one of the safest things you can do with your money at the minute. Point well and taken though.