For those of you interested in TBT - I know there was some discussion here on that, the following from Chuck Butler this morning about China. There has always been the "speculation" that there was an inherant agreement between US and China that we would buy their "stuff" (basically outsource our manufacturing to them) and in return, China would buy our debt (e.g., Treasuries, etc.). Per Butler this might be fraying at the edges, or at least that is my take on what he says below......

"The thing that kick started the risk takers overnight was the news that China's Industrial Production had grown more than forecast in November. Factory output rose 19.2% VS a year ago... This news was manna from heaven for Australia, as I've chronicled here many times over the years...

The bad news for China overnight came in the news that exports had fallen 1.2% in November... So, given the factory output, and the GDP that was 8.9% in the 3rd QTR, one has to believe that China has shifted to a domestic driven economy, and not one dependent on exports to the U.S.... Now, I know, there are those of you who do not believe this could happen in China... But until proven otherwise, I'll have to go with the data I'm given...

This could spell bad things for the U.S. should China become a true domestic driven economy, and along with the rest of Asia, grows without exports to the U.S.... Why is that spell bad things for the U.S. I hear you asking? Ahhh grasshopper... Because, it would negate the Bretton Woods II that has existed between the U.S. and China... The U.S. buys their "stuff" (I almost said cr*&) and they buy our Treasuries, (again I almost said cr*&!) If they don't need to do something with all the dollars they accumulate, who is going to buy our debt? Aye, YI-YI! "