Supply is Demand: Separating Supply From Demand Was Never Going to Work Long-term
Therefore, apologists for the status quo have yet to explain why China's industrial ascension hasn't led to a large and growing Chinese middle class. And the answer of course is obvious:
When the Ponzi borrowing ends, the trade imbalances will end; then the fiscal deficits will end for smaller sovereigns and eventually for the debt monetizers as well. At that point, the Developed world will experience the exact same resource constraints that the rest of the world has been experiencing throughout this entire era. The playing field will be leveled for the first time in decades. The consumption-oriented lifestyle will be a buried artifact of a corrupt and bygone era. Multinational profits will melt like a snowball in the sun, a casualty of collapsed revenues and self-destructing "leveraged recapitalizations". At that point, the terms deflation, output gap, and outsourcing will be in extreme disfavour among the stoned masses, but as usual it will be a day late and many dollars short.