This  article is incredible in its insinuation by the head of Bernanke, Head of the Federal Reserve in the US.

Chinese Savings Helped Inflate American Bubble | NY Times

The problem, he said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption.

Lets think about that statement – consumers buy things, that are often manufactured abroad – those items contribute to imports that must be paid for and even though much of that trade is financed in US dollars, profits and investment find their way back to the exporter, mainly China.

The insinuation is that Bernanke blames China for US imports? Huh?  This can only be characterised as the ultimate rationalisation for inaction during the last few years.  As the author (Niall Ferguson) notes:

Others say the Federal Reserve and the Treasury Department should have seen the Chinese lending for what it was: a giant stimulus to the American economy, not unlike interest rate cuts by the Fed. These critics say the Fed under Alan Greenspan contributed to the creation of the housing bubble by leaving interest rates too low for too long, even as Chinese investment further stoked an easy-money economy. The Fed should have cut interest rates less in the middle of this decade, they say, and started raising them sooner, to help reduce speculation in real estate.

Whether it is the massive shift caused by Petrodollars in 1974, or the recent boom times in the 2000’s it is futile to blame others.  Work with them to the extent that you can locate mutually aligned principles, but by keeping interest rates very low in the US that was a US decision alone, for example, and while it would have had other unintended consequences, it would certai8nly have slowed house price rises, imports and potentially moderated the current situation facing the US.