Saturday, February 12, 2011
We send a lot of dollars to China in exchange for stuff. The Chinese have been lending those dollars back to us, and we send them back for more stuff, and then they loan them back, and so forth. Credit blossoms, we get stuff, the Chinese become our biggest creditor, etick, etick. The interesting question, of course, is whether that gives the Chinese power over us, or vice versa. Hard to tell, actually.
Anyway, the good news is that the Chinese are suddenly buying our stuff, which is so much better for everybody. Both we and they would be much better off if that number tripled again over the next few years.
Feeblemind nailed it. China is facing a potential total crop failure in their wheat harvest and are importing wheat like mad. Most of what you see in this graph is increased volume of commodities at increased prices.