In the good old days there was a saying that when the American economy sneezes, the world economies catch a cold.

Or something like that.

Here's how much things have changed. Yesterday's Wall Street Journal had a front pager about how the world economies were being beaten down because of a downturn in the economy of … China.

"China's booming economy is cooling more rapidly than most forecasters had expected, undermining hopes that Chinese demand could help keep the global economy humming."

There was a time when we didn't like China very much. Mao was in charge of things. There was that pesky Cultural Revolution. China threatened to invade Taiwan about every other Tuesday. And they were Communists.

They were the Red Chinese. Remember?

If only, we used to say, if only the Chinese would open their markets to foreigner and adopt a market economy. If only they would trade with the West, we used to say, then things would really be much better.

Came the dawn and Mao died, the price of egg rolls didn't go up, China adopted a modified market economy (much as the U.S. Federal Reserve and Treasury Departments have done over the past 60 days), opened their markets to foreigners, and established a massive trading system with the West.

China, according to the CIA World Factbook is a country about the same geographical size as the United States but which has a population of 1.3 BILLION people. That is one BILLION more people than live in the U.S.

The Chinese Gross Domestic Product is about $7 Trillion; a little more than half of the United States' $13 Trillion.

But the United States' economy is mature. If GDP growth gets much over 4% per year, the Fed raises interest rates because inflation is the athlete's foot of mature economies. Once you get it, it is very hard to get rid of. Continued...