China offered a bid of (relative) confidence in the U.S. economy, stating its intention to continue buying U.S. debt, inspite of concern about the deterioration of American finances and potential depreciation of the dollar.

In a speech in New York, Luo Ping, a director-general at the China Banking Regulatory Commission, offered this bleak assessment: “Except for US Treasuries, what can you hold?”...Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.” This comes despite express concern from China about how the new stimulus package and multi-trillion banking bailout will erode value in the dollar and, so, in the value of China's treasuries. 

China's admission of its own limited options underscores the degree to which decoupling between the U.S. and global economies has been overstated in recent years.  Further, it suggests the degree to which a global recovery will have to be lead by the U.S. 

The dilemma is that, just at the moment when the world is looking to the U.S. for economic leadership and reform, it appears to be as insulated as ever from global influence.  Indeed, for the foreseeable future, the world economy will be driven by fiscal policy forged by the often narrow and overly politicized perspectives of Washington's insiders.  Let's hope they've got more of a plan than they're letting on...