Chapter 52 guide

★The long-term reliance on China's low-priced imports has caused the level of US consumer spending to exceed income levels, and the long-term reliance on China's purchase of US treasury bonds has increased liquidity in the US financial system.That's why many experts, from Wall Street to the World Bank, believe the global financial system has become fragile and has become too reliant on Chinese production and American consumption. ★The Chinese model has been proven to be a more stable model, whether it is intentional or unintentional, the United States during the Obama administration has begun to partially emulate it.

★China has risen and is beginning to focus on the unique fusion of China and the United States, which is between the world's largest economy and the most dynamic economic growth. The author's analysis of the integration of China and the United States is in-depth and objective, and the expectations for the integration of China and the United States are also very high. He believes that "whether 'China and the United States' is good or not, it has become an unchangeable fact. If we do not follow this Acting on the facts would have hugely destructive consequences. China needs America, and America needs China. Over the past 20 years, the Chinese and American economies have become one, far beyond Chinese manufacturing and American consumption. In fact, Now and in the future, the prominent feature of Sino-U.S. integration will be that China consumes U.S. products and provides financial support to the U.S. government to provide development opportunities for U.S. companies. The development of Sino-U.S. integration cannot be stopped unless both governments take containment measures, And once the integration of China and the United States is blocked, the consequences will be disastrous."

“We are now facing the worst crisis since the Great Depression.” In the fall of 2008, in the United States and around the world, the saying was a cliché.The bankruptcy of Lehman Brothers was the straw that broke the camel's back. In early October, the global credit system had essentially stopped functioning, and the flow of credit and assets was as important to business as water is to the human body.If growth in purchasing power is merely slowing, the global credit system can still falter, as if people can survive without eating for weeks.But if the flow of short-term credit and funds between private and national banks is cut off, the global credit system is not far from stalling.A world where credit stops flowing is as powerless as a world without power.This is a problem faced by governments around the world.

For years, Wall Street financial institutions have been advocating a new risk model. The development of information technology in the 1990s made innovations and some financial models possible, and new products increased in large numbers.Many of these products have hidden risks of specific collateral instability.Homes built in Nevada, Florida and central California became the temporary foundation of the new global economy, which was not what homebuilders and realtors intended.But from 2005 to 2008, these houses supported not only middle-class families, but also derivatives and contracts worth trillions of dollars.These derivatives and contracts should diversify and mitigate risk.Instead, they concentrate and amplify risk.