A summary in NYT of the fascinating Ferguson/ Fallows debate at Aspen on the economic relationship between China and US.
Ferguson: US and China are divorcing economically. China will focus on internal consumption, not exports. “Depreciation (of US $) is inevitable and the Chinese are working to end the dollar’s role as the world’s reserve currency.”
Fallows: “… doesn’t know what the future will hold, but he believes that Chinese officials still see the dollar as their least risky investment. Domestically, China will not turn democratic, but individual liberties will expand. He agreed that China and the U.S. will dominate the 21st century, but he painted the picture of a more benign cooperation.”
Chinese Fireworks Display | NYT
I came to the debate agreeing more with Fallows and left the same way, but I was impressed by how powerfully Ferguson made his case. And I was struck by their agreement about what to do. This conversation, like many conversations these days, gets back to America’s debt. Until the U.S. gets its fiscal house in order, relations with countries like China will be fundamentally insecure.
Bankwatch 
I have been raising the issue of impending collapse of dollar which may be also be outcome some deliberate moves. The world has to see that the dollar collapse does not come in a sudden way and its demise is calibrated so that no one is too upset of too badly damaged. The soverign guarantee does not guaratee the real value in respect of redemption and here is the catch. World has encountered already a financial debacle which has not been properly analysed any currency related debacle will be the last straw on world’s economic stability.