Remember that China holds a lot of our debt. You will not see much public chest beating from China over this because of that fact. Both are equally vested in each others success as the other. China does not want value of the US bonds to plummet and US needs a stable manufacturing partner. At least for the foreseeable future, this economic and political two-step will continue.

However this does present serious doubts about the irrational exuberance in the strength of our markets for long term. It is hard to gauge China and its intentions. I am not saying that US has moral supremacy over China, but that China seems to be doing now what US used to do, for its own stability sake, twenty years ago. It is preparing to be the economic behemoth, despite the troubles it face in real estate and regionally.

The next twenty years should be pretty interesting.

Edit: I wanted to add a reference to this paper out of the Pentagon from two Pentagon top level staffers who assert that we should reduce our military spending and reinvest it in our youth. A very prescient analysis of where United States is heading, in the world. I wanted to add it as its own HN submission, but was not sure if it would be well received. Here is the link to the pdf: http://www.wilsoncenter.org/events/docs/A%20National%20Strat...