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My summer vacation in Maine offers an opportunity to schmooze with young professionals that are leading exciting lives. Much of what I learned was instructive but also depressing.

First up was a young commodity trader in his 30s who has been based in Singapore for almost 10 years. We talked about what the United States looks like from halfway around the world, and the view was not good.

What he called the "Twin Deficits" were the biggest concern of traders who, unlike economists, actually have their own money tied up in bets on future events. The twin deficits are the massive amount of borrowing in this country coupled with our huge trade deficits.

The bottom line for these young traders is that they were investing in cash for the moment to be prepared for buying opportunities that lie somewhere in the future.

Coupled with this pessimism was the consensus in Singapore over the possibility of an economic bubble bursting in mainland China. Dominating that country are massive real estate developments rising out of the ground that nobody is filling with companies or residents. The Chinese banking system is "a mess" -- flooded with money that is essentially manufactured by their central banks.

In the world of large banks, there is a vaguely understood system whereby central banks, like our Fed, loan money to regional banks. These banks, depending upon their reserve requirements, can then turn and loan 10 to 15 times what they have been loaned by the central bank.

In simple terms, it's the modern day equivalent of a king back in the Middle Ages deciding to print more money, and it ultimately leads to inflation as the currency is cheapened. Presumably, China is investing its "manufactured money" in real estate developments that have no users while the true hard currency (i.e. dollars) they are earning are invested back here in U.S. government bonds -- a supply of loan capital that has fueled our economic growth by keeping our interest rates low.

If a Chinese collapse prompts them to need this hard currency back, we can kiss our strong economy goodbye and witness what could be a world-wide collapse.

In a nutshell, this is the consensus of American traders in Asia. (A popular book there is about the coming collapse of China.)

Also from the next generation came some mixed news from Iraq. In this case, a recent Ivy League graduate who had completed an ROTC program found herself commanding an engineering unit in Mosul. She said that, with one disastrous exception, her unit was generally well received because "we were there to fix things, and people were generally pleased to see us."

In her view, leaving Iraq now would jeopardize the lives of the 150,000 troops now serving there, so leaving today would be a disaster, and we should be realistic about the long-term obligation we have set in motion.

But that's an expensive obligation, costing billions monthly, and for how long?

I ask a well-traveled next generation what we look like from afar, and wind up wishing I hadn't asked. Collapse of China and a long-term, expensive commitment in Iraq? Something's got to give, and if I had to pick that something today, I suspect it will be the money borrowed from our Social Security trust fund.

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