1.4 Trillion, and Rising.

"Today’s American system values upheaval; it’s been a while since we’ve seen too much of it. But Americans who lived through the Depression knew the pain real disruption can bring. Today’s Chinese, looking back on their country’s last century, know, too. With a lack of tragic imagination, Americans have drifted into an arrangement that is comfortable while it lasts, and could last for a while more. But not much longer." The Atlantic's James Fallows examines the unstable financial codependence between China and the United States, and how it could all too easily unravel. "Lawrence Summers calls today’s arrangement 'the balance of financial terror,' and says that it is flawed in the same way that the 'mutually assured destruction' of the Cold War era was...With allowances for hyperbole, something similar applies to the dollar standoff. China can’t afford to stop feeding dollars to Americans, because China’s own dollar holdings would be devastated if it did. As long as that logic holds, the system works. As soon as it doesn’t, we have a big problem." Update: Make that 1.53 trillion.