Asia likes gold and wants nothing more than to have it now that it was lowered by New York Algo Trading Machines. Asia thanks the US for dumping their gold. They would like nothing more than to continue to buy at $1400. If the deflation goes unnoticed, why would the creditors care? As long as the dollars the Central Banks swap are deemed non negotiable, both parties, as debter and creditor, will stay in business.
What is austerity to the Chinese? There is none and they are accepting a rising currency. Their story would be impeded if wages don't rise. On the other side of the equation is the debtor. Now austerity must be implemented in an economy that is reeling from the depression that never was. The sides have little margain for profitability. Sell low priced products in China. Seems to be the only sure bet when the American economy has a long way to go down. Will there every be 'High End China'? Probably not. Maybe more than now, but how much potential for growth is there?
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