People sometimes miss the forest for the trees. Dan's post here misses the forest to find something funny about the bark.

The story here is the unintended consequences that might flow from a move made by the Fed out of desperation. With the incoming Congress dead set against doing anything to stimulate demand, Chairman Bernanke and his associates are attempting to restart growth by making money cheaper.

There's nothing else the Fed can do, faced with an economy that looks like it will feature nearly 10% unemployment and underemployment half again as high as far as the eye can see. Will it contribute to restarting growth? And what kind of growth is it most likely to stimulate? Obviously, we'd like to see "QE2" result in cheaper American exports, and maybe it will. However, the major intended beneficiaries of lower long-term interest rates are the depressed home construction and real estate industries, the unsustainable growth of which during the bubble years helped get us in this fix in the first place.

Is that really desirable? Are we down to attempts to reflate asset bubbles as the only way to reduce unemployment? Are we sure we know the consequences to our global economic position of a step that signals clearly that devaluing America's overseas debt is the main tool we will use to deal with our trade imbalance?

I don't blame Bernanke for wanting to try something. Perhaps if Congress weren't so inert, he wouldn't have to. But just because the Fed feels it has to do something doesn't mean what it is doing will work.

In all fairness:

"China’s leading credit agency the Dagong Global Rating Company has *once again* marked down America’s ability to repay its debt. For the second time in four months, the agency has wielded the knife on the US’ credit ranking, downgrading it from AA to A+. The latest downgrade reflects America’s deteriorating repayment capacity, Dagong said, adding that *the country’s second round of quantitative easing is unlikely to help its situation*." Link: Chinese credit agency slaps US with another downgrade

Moreover currency manipulation looks like being the main event at this week's G20 global economic forum, such is the widespread concern in much of the world. Hopefully the grouping will get round to investigating thoroughly the reasons for the destruction of global monetary discipline in 1971, which led to this sorry state of affairs.

"Chinese Water Quality Institute notes Chinese toys contaminated with lead after being washed in Washington, DC municipal water."

Chinese family planning authorities say US going bankrupt supporting children created by licentious American practice of 'Breeding like drunken rabbits on spring break'"

Dan,

I thought I told you, stop writing about China. You really know nothing about China. It never occurred to you that there's a strategic and efficient method to China's perceived madness.

It's a waste of time for me to explain it all, you're incapable of understanding China. Don't you ever ask yourself why and how is it that China's making slow and methodical gains in the world yet you some how question its every move?

Seriously, do me a favor, stop writing about China before I have to quit reading FP.

"We don't really care about SEC's ruling cause pretty soon it will be marginalized and irrelevant in the global market."

The American's failure to achieve a balanced economy can only be taken as a sign of inferior intelligence and a callous disregard for their descendants?

The Chinese have the reputation of honoring their past, and should look to their rich archives in developing appropriate slings and arrows for the profligate American empire.Here are some golden oldies from Chariman Mao on bureaucracy that could be applied to Trade Officials, White House Officials, and Congressional Aides:

They are conceited, complacent, and they aimlessly discuss politics. They do not grasp their work, they are subjective and one-sided; they are careless; they do not listen to people; they are truculent and arbitrary; they force orders; they do not care about reality; they maintain blind control."

"Documents are numerous; there is red tape; instructions proliferate; there are numerous unread reports that are not criticized; many tables and schedules are drawn up and are not used; meetings are numerous and nothing is passed on; and there are many close associations but nothing is learned."

"They are stupid; they are confused; they do not have a mind of their own; they are rotten sensualists; they glut themselves for days on end; they are not diligent at all, they are inconstant and they are ignorant. "

"They seek pleasure and fear hardships; they engage in back door deals; one person becomes an official and the entire family benefits; one person reaches nirvana and all his close associates rise up to heaven"

(see http://www.marxists.org/reference/archive/mao/selected-works/volume-9/mswv9_85.htm. These are a part of Mao's 20 Manifestations of Bureaucracy.)

Something a bit more interesting to me is the question of why the New York Times prints so many stories about Sino-American tensions (and inevitable attempts to find stories of anti-Sino Asian alliances) that never really say anything new.

Zathras, if you want to debate the merits of QE, why don't you go over and rant at Scott Sumner's site? I think he might have a rejoinder or two for you.

America is Ugly and dresses funny

America is so Ugly, Canada had to tie a Pork Chop Around its Neck so the dog will play with it.

America is so fat, it sweats butter

America's mother was a hampster and its father smelled of elderberries!