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The Bretton Woods 2 system – where China and then the oil-exporters provided (subsidized) financing to the US to sustain their exports – will come close to ending, at least temporarily. If the US and Europe are not importing much, the rest of the world won’t be exporting much.

And rather than ending with a whimper, Bretton Woods 2 may end with a bang. In some sense Bretton Woods 2 has been on life support for a while now. China’s recent export growth has depended far more on Europe than on the US. US demand for non-oil imports peaked in 2006. One irony of the past year is that the US was borrowing far more from China that it was buying from China. Campaign rhetoric that the US was paying for Saudi oil with funds borrowed from China isn’t far off – though it leaves out the fact that the US also borrows from Saudi Arabia to pay for Venezuelan, Mexican and Nigerian oil.

If Bretton Woods 2 ends in 2009 – if US demand for imports falls sharply in the last part of 2008 and early 2009, bringing the US trade deficit down – it won’t have ended in the way Nouriel and I outlined back in late 2004 and early 2005. We postulated that foreign demand for US debt would dry up – pushing up US Treasury rates and delivering a nasty shock to a housing-centric economy. As Brad DeLong notes, it didn’t quite play out that way. The US and European banking system collapsed before the balance of financial terror collapsed. Dr. DeLong writes: All of us from Lawrence Summers to John Taylor were expecting a very different financial crisis. We were expecting the ‘Balance of Financial Terror’ between Asia and America to collapse and produce chaos. We are not having that financial crisis. Instead we are having a very different financial crisis. Catastrophic failures of risk management throughout the entire banking sector caused a relatively minor collapse in housing prices to freeze up global finance to a degree that has not been seen since the Great Depression. The end result of this crisis though could be rather similar: a sharp contraction in credit, a fall in US economic activity, a fall in US imports and a fall in the amount of foreign financing the US needs.* The US government is (possibly) trying to offset the fall in private demand by borrowing more and spending more — but as of now there is realistic risk that the fall in private activity will trump the fiscal stimulus.

The Tindo bus is the stuff of car-free, green, geeky dreams: It epitomizes efficient urban transportation and energy use, and to top it all off, it’s free. Our friends at EcoGeek first tipped up off to the story.

How about an inkless printer for your cell phone? From text messages to images and calendar events, as cool as it is to have all your info stored in a gadget at the tip of your finger, there’s something classic about holding a print version too. At the Consumer Electronics Show in Vegas, Polaroid revealed its portable, inkless printer that can be used with small devices like cell phones and digital cameras. The printers, about the size of a deck of cards, use thermal printing techniques on special paper. It’s expected to hit the North American market later in 2008 and retail for about $150.

alled the HB-SIA, the prototype aircraft consists of wing covered with solar cells with a span of 200 feet. Despite that huge wing span, the craft will employ lightweight materials to tip the scales at only 3,300 pounds. That combination will allow the plane to fly at just 28 miles per hour, a speed that will keep energy consumption low, allowing the solar panels to not only power the craft during the day, but to also store up enough energy to keep it flying at night. Construction of the HB-SIA began in June and is expected to be complete by the summer of 2008.

Google Reader - my favorite RSS application - recently added a powerful search functionality that has made me infinitely better at studying people and their social patterns. Using Google Reader you can now search an individual feed, tag or a folder and get back a total item count, all sorted by date for as long as you have been a subscriber to that feed. In my case, some of my feeds go back to October 2005 when the Reader first launched. That's a ton of data to mine for trends. Now that my reader shows a huge cache of posts, I am subscribing to tons more feeds, stuffing them into a folder solely for the purpose of data mining them. The site also has limited set of advanced search operators. One hopes they will add more. It's worth noting that I don't actually read these high volume feeds. Rather, I mark them all as read so they get logged in my feed database and can be searched for insights.