Isn't this a natural and needed correction? Why should we be surprised that "subprime" loans have a higher default rate? Weren't they always expected to have a higher default rate? Isn't that what makes them subprime? It's the same damned bullshit that caused the great depression, the tulip crisis, and the internet bubble. People take out loans they can't pay on the expectation that what they buy with the money will rise in price so much that will allow them to pay back the loan and turn a profit. All well and good until, all of the sudden, the price stops going up. Within the context of a discussion of the history US/Indian relations, sure it does. Why is that ultimately and not now? Or some point even further in the future. You have a very Malthusian zero sum game outlook. Remember the eighties? Everyone thought Japan was going to end up owning the world. Then they hit some hard times. What is China's comparitive advantage over the US? Low wages, lack of debt. In the US (and the West in general) we have a more free and open society. We have a much less corrupt government and corporate structure (the British sence of fair play you've alluded to in the past). We have a growing population (as opposed to China's shrinking population). China has many of its own problems to deal with. It's special mix of relative economic freedom with dictatorship in a theoretically communist country could blow up on them at any time. Suppose they get a new leader who wants to return to an ideologically purer form of communism. Suppose he executes the evil businessmen and puts his cronies in charge? Or, on the other hand, suppose the people of China get tired of their lack of political freedom and revolt? Throwing the country into chaos. Anything can happen. You seem to assume that everything will go just right for China and completely wrong for us. It's possible, but I'd say very unlikely. The more likely outcome lies somewhere between your Mad Max Beyond Thunderdome future and Sandy's disneyland adventure.