Simon Johnson On China

http://www.huffingtonpost.com/simon-johnson/should-we-fear-china_b_476339.html

Johnson's premise seems to be that a China-propelled steep depreciation of the dollar will have a substantial upside and cause only minor pain. But the US has not only lost much of its export business, it has lost the means to produce exports in many cases. The factories are gone- or the horses have left the barn, as you write.

Waving a weak dollar across the land is not going to work like a magic wand and make factories pop out of the ground like corn stalks. I'm not sure Johnson has factored in what a weak dollar will mean for US energy costs. Factories need oil to heat them, and the goods have to be trucked to port- a weaker dollar is going to immediately push those costs right up.

This article just seems to be one long sell job on how much we're really really going to love a weaker dollar, but if we're already dependent on imports ( as we are ), why should be encouraging a faster loss of the dollar's purchasing power?

Johnson has not convinced me that China selling treasuries in volume would not mean serious trouble.