The thing that worries me is a double dip recession. The US is still a very sick economy but is still the biggest economy. We, and China, are doing well because we both stimulated our respective economies. I did note at he time China was planning the stimulus as massive capital works and that a cash stimulus should precede that because there is a years-long lag before sod is actually turned on such big projects. The Chinese govt a few months later did make such a cash stimulus.
Now, in the absence of a US recovery (it did spend the 19030s in Depression) it may happen that our and China's economies will decline again needing more stimulus. We could easily borrow another $1-200Bn tho the Opposition and Dickhead Fielding might not let that stimulus Bill through the Senate.
Then what?
I won't be fully comfortable until the US economy picks up again. Among other things, it needs to be able to raise interest rates to prevent another housing bubble, etc. The US recovering will cause out dollar to go down a bit (relatively) making exports easier.
A sidenote. The AFR I read this morning had a big article about rural industry. Fat lambs ATM are selling for $50 each, previously unheard of! These are all going to China, as is much other rural output. So we are again, if only partly, riding on the sheep's back
In the absence of a full-on mining boom our rural exports are fulfilling a vital role!
