Mirror, Mirror (The Globalization Waltz)

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In the past month, the world has gotten smaller. Call it Chaos Theory or Globalization 3.0 but as a butterfly flaps it's wings in Kansas, the Nikkei falls in Tokyo. To quote David Byrne of Talking Heads, How did we get here?

1) America's side of the mirror: The sub prime Housing crisis -- I learned to never spend what you don't have. If you must buy a big ticket item, put at least 1/3 or 50% down before the loan kicks in. The sub prime lenders meant giving money to people who could not afford it. When the foreclosures kicked in on the sub prime lenders, it echoed in America's banking system (Central and public); To stop the fall, the European Central Bankers flooded America's central banks with cash to stop the fall.
During the 40's and 50's, America's finances saved Europe, this is the EU's first "Thank you" to the US. With financial transactions happening in cyberspace 24/7, the world will not suffer another Great Depression or hyperinflation. The world that brought forth Hitler and Huey Long are pages in a history book, not written on a stock ticker.

2) Asia side of the mirror -- Toys from the China Closet -- Bad toys make it to the American market; No conspiracies or act of war -- just badly done toys. China works overtime to make trade palpable with the US, the wheel spins round. As Chernobyl was to Russia, the Mattell follies are to China. The trade barriers will drop as the situation returns to normal. The world shrinks. However, because of China's trade problems with America, the Nikkei falls.

We are two half-steps into the waltz -- Who is leading? America, the Europeans or China?