While Dr. Doom (Roubini) warns of a double dip recession, an interesting New York Times article also appears, Asia’s Recovery Highlights China’s Ascendance.

In past global slowdowns, the United States invariably led the way out, followed by Europe and the rest of the world. But for the first time, the catalyst is coming from China and the rest of Asia, where resurgent economies are helping the still-shaky West recover from the deepest recession since World War II.

While Roubini warns on oil price increases breaking any potential recovery, we note China's robust growth is causing oil prices to rise.

Anyone recall China's Quest for Oil quoting deal after loan after acquisition?

As usual, the focus is on the consumer, with scant mention of America as a producer. The only focus seems to be what if Americans and Europeans just plain don't buy it? There is no alternative seemingly in main stream economists' universe (say increasing domestic production, domestic economies and localities, i.e. increasing income and jobs in America and Europe...nah, that's just too passé).

There is one damned if you do, damned if you don't commentary by Roubini that is most interesting on the massive deficit:

There are also now two reasons why there is a rising risk of a double-dip W-shaped recession. For a start, there are risks associated with exit strategies from the massive monetary and fiscal easing: policymakers are damned if they do and damned if they don’t.   If they take large fiscal deficits seriously and raise taxes, cut spending and mop up excess liquidity soon, they would undermine recovery and tip the economy back into stag-deflation (recession and deflation).

But if they maintain large budget deficits, bond market vigilantes will punish policymakers.   Then, inflationary expectations will increase, long-term government bond yields would rise and borrowing rates will go up sharply, leading to stagflation.

Did I mention the United States needs a manufacturing policy as well as increased spending, tied to U.S. citizens, permanent residents to perform public works projects which are strategic to America's long term growth?