With the subprime mortgage crisis comes the sinking of the Titanic, a.k.a. “America” while the Federal Reserve rearranges the deck chairs. “Chimerica” is no longer just a clever buzzword, it is a foretelling of the new retrograde technology: China 2.0 (a.k.a. the United States). The U.S is usurping China’s former role as manufacturer and exporter of cheap goods. I mean, just look at WalMart, headquarters: Bentonvile, Arkansas, USA. Or Home Depot, headquarters: Atlanta, Georgia, USA. Both offer cheap goods at a low price – something the former China (China 1.0) was known for.
The US is leveraged to the gills. During the real estate boom, homeowners were offered 125% the value of their homes. Now, do you think it is good business to loan people more than the collateral is worth to people who can’t pay back over-leveraged homes? No wonder foreclosures are falling like depth charges, blowing up central banks like so many submarines. Even the Federal Reserve can only juggle so many potential bank failures.
The good thing is that China 2.0 manufacturers can now send their cheap goods overseas – to China! (a.k.a. America 2.0). The retrograde technology of China 2.0 is to benefit America by riding the coattails of the huge China boom. By lowering the costs of our goods, we can now cater to the increasingly upscale tastes of the new Chinese upper and middle classes. Now, they can look to the west to get their iPods and iPhones and iEverythings! America 2.0 (China) never looked so good!