Letters to the Editor
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@mrgeek
I understand fully that several weaknesses may be at play here. But I would like to point out that a model already exists for what is going on here. The model is nearly the same, though it differs in scale. (Full disclosure - this was a model in a fiction novel, so some details may be incorrect, but the novelist is well-known for good research on background material.)
In the late 80's and early 90's, the Japanese created a mini-bubble (in terms of the US - for them it was huge) of real-estate. US property holders realized they could bilk the Japanese out of huge sums of money because they had inflated ideas of what real estate was worth (in Japan, land is extremely expensive). Japanese concerns bought highly overpriced commercial property, and lots of it.
Again, I concede there may have been other weaknesses at play here. One possibility is the US was in a recession when this happened, making their imports less attractive.
Not in dispute is what happened (though causality may be debated). When that bubble popped, the Japanese economy tanked hard, causing a decade-long recession. Major firms had to lay off workers (something unheard of since their recovery from WWII) and some actually went bankrupt. This is a nation with a robust manufacturing economy.
Now consider the US - real estate bubble, house-of-cards CDO structures, huge government debt, monstrous trade deficit. To top it all off, we have an anemic (if not downright comatose) manufacturing sector.
When I saw this bubble, I knew we were in deep guano. Nothing I've seen so far has changed that opinion.