Movement of Capital From West to East

This doesn't jive well for the positive economic rhetoric or the recent suggestion that the Fed may need to mull exit late 2011. There’s an old saying that ‘talk is cheap’. The Fed's policies for all their bluster have little influence on real (inflation adjusted) growth. Capital continues to move from West to East because of the real economic growth differential.

Headline: Economists foretell of U.S. decline, China's ascension

Leading thinkers in the dismal science speaking at an annual convention offered varying visions of U.S. economic decline, in the short, medium and long term. This year, the recovery may bog down as government stimulus measures dry up.

In the long run, the United States must face up to inevitably being overtaken by China as the world's largest economy. And it may have missed a chance to rein in its largest financial institutions, many of whom remain too big to fail and are getting bigger.

Source: news.yahoo.com