Brad Setser has a new post up showing how China's exports have fallen off a cliff. Imports have fallen as well, so China still has a surplus, just nothing like the surplus they will need to fund the Obama-Reid-Pelosi madness. And since China is the only remaining large creditor in the world, this means the Fed will have to start monetizing the debt that much sooner. Dig this chart of Chinese exports / imports.
This means we will be printing money with nothing behind it. Lots and lots and lots of money. The Obama budget calls for $1.75T of borrowing this year with some very rosy assumptions. I think they will blow by $1.75T like it was standing still. I expect $2T is debt, minimum. With no one to borrow the money from, I'm bullish on green ink.
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