It is getting interesting. Attention has been focused since August 11 on the unsustainable nature of the Chinese problem. What China needs, given the over-investment in non-productive assets estimated at $1.7 trillion a year for several years, is a deep recession, the writing off of several trillion dollars of debt and the refinancing of the banking system. You cannot do all that without interest rates at almost zero and a weak exchange rate. Equally, the United States has a different problem. Since 2014, consumer lending in all its forms – credit card, auto loans, new housing – has been picking up and is now averaging some 9% growth in real terms. Given these loans are typically 2x GNP, it means some 18% more dollars are in the economy and makes estimates of 4% nominal GNP growth look unlikely. (VIEW LINK)