With Chinese President Hu Jintao in Washington this week, a lot of talk has turned to the largest business the U.S. has with China – currency. Mr. Jintao said making the yuan “an international currency will be a fairly long process.”  Yet it has begun.

One of the first steps in giving the redback some clout is trading it. Exports are being sold for yuan at a staggering rate – China has authorized 67,359 companies to trade for their business in yuan, compared to just 365 in June. Part of the reason for this is Hong Kong, where huge vats of yuan are being stored, hedged, and traded. All other trade routes for yuan besides imports and exports are strictly regulated.

In China, views of the visit are generally jovial. China Daily, an English-written newspaper, shows that most Chinese like America, although our likeability index among Chinese has fallen to about 48 on a scale of 100 from 65, when President Obama visited in 2009. This, along with China’s recent influence on Europe shows a country that is trying to open up in order to be more internationally well-liked. So far, they aren’t doing a bad job. Besides that Nobel Prize fiasco, China has shown that they want the Euro to flourish, and that two heads of state can get along well together, and enjoy a “quintessentially American” dinner.

What needs to be realized is that our country will not see the kind of wealth we experienced over the past 50 years for at least another generation. There has been talk of American plutocracy and an aristocracy, and for good reason. As I’ve written before, if you didn’t cash in while the going was good, chances are you didn’t deserve to. With the economy on the verge of a double dip, it shows how further economic restructuring is necessary. This means a large removal of the quondam “middle class” into the lower body of society. The one-time “upper-middle class will become the upper class, eventually edging into the elite aristocracy (upwards of $250,000), or a much smaller middle class that will persevere as small business owners and entrepreneurs ($80-$100,000).

By extending the tax cuts, this new class structure will more easily emerge, and we will not be fooling ourselves. We will then be able to reform taxes in another few years, when the economy is on a better footing, and people are more sure of where they stand.

The unemployment rate dropped for June, to 9.5%, even though 125,000 jobs were lost. The reason is that the rate is defined by people who are out of work and looking for work. The decline in the civilian labor force demonstrates that people are not looking for work any more. What happens when they do, is the rate will climb up, unless there are available jobs, which there probably won’t be.

The International Institute of Finance (IIF, based in Washington) predicts that as mature economies end their stimulus packages at the beginning of next year, growth will decline. Forecasts for 2011 from around the world predict slight decreases in growth, which when backed by austerity measures, will continue for years.

When the Bush tax cuts expire on January 1, this will be good for the immediate repayment of our massive debt; but many are dissatisfied with higher taxes. The thing is, if growth lags, and the mini stimulus that failed for the third time in Congress this week doesn’t get passed, you can likely expect that double dip we’ve been hearing so much about.

So it seems as though Obama – gasp! – may be right about his economic policy, deferring payment for a few years until the economy has legs. But with his support still well under 50%, don’t hold your breath.

Estonia joined the E.U. yesterday, becoming the 17th member. The small Baltic state will switch from the kroon to the Euro on Jan. 1 2011.. There remains mild concern over the sinking currency, as voiced by Dmitri Medvedev. Austerity measures are being enacted all around the Euro Zone – France will up their retirement age to – gasp! – 62! and Germany, watching Greece, Spain and Portugal, hesitates to to inject money into their market to increase spending.

At home, interest rates are still low, easing fears that the economy could double dip. BP agreed to a $20 billion fund to help Gulf Coast residents, and Obama was booed for his Oval Office address. He warned that stimulus procedures must continue in order to maintain recovery. With the G-20 conference in Toronto next week, Obama also wants Chinese consumers to continue buying, by allowing the remninbi to appreciate. Their export driven economy will likely keep the remnibi where it is, or inch it ever so higher, due to its recent strength against the decreasing Euro.

All in all, people aren’t really sure where we’re going. Stimulus measures must be continued, but the recession is becoming every day more a thing of the past. As Randy Frederick, director of trading for Charles Schwab put it, “None of the problems have been resolved. They have been sort of moved off the headline page.”

On Thursday the Dow was up almost three percent to 10,172. Foreign reports boosted markets as Australia had stronger than expected employment figures, New Zealand raised interest rates, Japan’s economy grew 1.2% in the first quarter, and the European Central Bank boosted its expectations for the European growth this year. China also boasted a $19.5 billion trade surplus in May. Although some remain confident that an economic slowdown for China is inevitable, at present, numbers don’t lie.

Here, weekly unemployment benefit rolls fell by more than a quarter of a million to about 4.5 million, the lowest since December of 2008. While this number is continuing to improve, it is ever so slight. Unemployment is one of the most crucial aspects to an economy because it indicates general consumer confidence and the overall rate remains above 9%.

Ben Bernanke said that if markets hold, the U.S can expect 3.5% growth this year.

BP’s stock increased more than 10% yesterday, amid rising tensions between Britons and the American government, which were muted by the leaders of both nations. BP remains an important asset to the British economy, last year paying $1.4 billion in taxes.  With a revised estimate of the oil leaking daily from 20,000 to 40,000 barrels, the U.S. government requested that BP pay the salaries of U.S. workers idled from the embargo on deepwater drilling. BP may have to cut dividends this quarter.

New job data is helping American markets as 55,000 jobs were added to the private sector during May, while jobless claims fell. Tomorrow’s job data is expected to boost markets higher.

Euro jitters are still around though, and overgrowth in Asia was expected to dampen the markets.  World wide factory activity grew this month however, with  only Greece and Hungary contracting. India, Japan, Ireland, Turkey, Switzerland and the Czech Republic experienced positive growth from April.

A mix of large retailers like Macy’s, Target, and Gap reported positive growth, but fell just beneath Wall St. expectations.

Meanwhile JP Morgan was fined a record $49 million by the British Financial Services Authority, for not keeping separate its clients monies separate from the firm’s.  If these funds aren’t kept separate, then it is impossible for clients to have their funds returned if a bank fails.

It seems as though a double dip recession will be avoided, for now, at least. The Fed will likely keep interest rates at zero until early 2011. Growth continues slowly, and hopes that inflation will rise may promote action on the part of the Fed to raise interest rates.

Market trends are climbing back to normal, but slowly.

After bailing out the banks, governments have kept interest rates low, and as a result, profits have soared. News about the 1st quarter was slightly disappointing today, but 3% growth ain’t bad. Two big factors this week: geopolitical fears coming from the Pacific Rim, and foreign (European) debt.

Many investors worry that if European governments all start closing their fists at once, another recession looms. But the flip side is that if countries like Greece and Spain don’t exercise fiscal restraint, then default and the banks holding that debt will flounder.

The rate of interbank lending (LIBOR) has soared recently. But as banks become more concerned about their lending rates, they may become more reticent to lend, which could mean a freeze in the markets similar to that of 2008.

In general, the ease of recovery has been part of the reason for the volatility of the markets.  There will be a time when interest rates return to normal levels, and fiscal policy tightens. This return to normalcy, for many investors, is scary. How it will be effected is still unknown.

And what about deflation? Price to earnings ratios are still higher than they should be, trading at 20 times what earnings actually are.

While profits and interest rates remain good signs, political trouble and financial regulation worries bears. Guess we’ll have to wait and see.

United and Continental have merged and will be called United in a deal that will make them the largest airline in the world. Globally, the airline would have a 7% part of the airline market, and 20% domestic share.

For consumers, this means higher airline prices and fewer routes. Over the course of the past decade, however, certain mergers have had to fight with discount airlines like Southwest, and JetBlue, along with other factors that have harmed the industry, like the terrorist attacks of 9/11, rising oil prices, and the recession.

The companies had begun talks in the past, but those deteriorated due in part to United’s weak financial health. In 2008, Continental was on the buying side. The falling through of these talks served as a preliminary to what helped the companies merge so quickly.

The company will be called United, will be based in Chicago – a city that has badly desired a major corporation to call it home – and will be run by United’s chairman for two years, until Mr. Smisek of Continental will man the helm. It will also keep the Continental colors and retain a large presence in Houston. Other airports where the new airline will be prominent include: SFO, Newark, and O’ Hare.

European officials predicted weak growth for their continental economy at 0.7% which, from last year’s 4% contraction, is a marked increase. These expectations come from improved export rates, but investment remains weak and there are other problems within the E.U.

Greece is the largest one. The Mediterranean country finds itself in a position similar to American International Group (A.I.G.) when credit-default swaps caused by banks and hedge funders bet on defaulting. If Greece defaults on its debts, the owners of these swaps stand to profit hugely. This seems to be, unfortunately, a vicious circle. As the banks and investors invest in Greek debt, the cost of insuring this debt rises. Then bond investors who see these signs  refuse Greek debt, making it more difficult for the country to borrow monies.

Others argue that the Greeks are to blame for hiding their debt in the first place, using “creative accounting” to do so. In any event, a Greek default could spread ruin to other shaky economies, like those of Portugal and Spain.  While the potential for a Greek bailout by a wealthier country like Germany is slim, Ireland, recently in a similar position, was able to build international trust back by cutting its national spending and reforming its institutions.

Warren Buffett, America’s second-richest citizen, hurts the most. The Oracle of Omaha dropped US$10 billion from his personal balance sheet as shares of Berkshire Hathaway fell 20% in 12 months. He is now worth US$40 billion. Beating out Buffett for the 16th straight year as America’s richest man is Microsoft co-founder Bill Gates. Sluggish Microsoft shares and declining outside investments pushed the software visionary’s net worth down US$7 billion in 12 months. The top-10 richest Americans lost a combined US$39.2 billion in the past 12 months, a 14% decline.

The biggest gainer is banker Andrew Beal, who tripled his net worth to US$4.5 billion buying up cheap loans and assets as the markets crumbled last fall. Membership on the list was made easier as the price of admission dropped US$350 million, from US$1.3 billion last year to US$950 million this year, paving the way for 19 new members and 19 returnees.

Newcomers to the list include Marvel Entertainment chief Isaac Perlmutter, whose net worth soared to US$1.55 billion after Disney agreed to buy the superhero outfit in August for US$4 billion in cash and stock. Other new members include Bloomberg LP co-founder Charles Zegar (US$1 billion), mapping-software magnate Jack Dangermond (US$2 billion) and trading titan Steven Schonfeld (US$1 billion). You can check out the top-24 of the ranking list below:

The complete list can be found at www.forbes.com/lists/2009/54/rich-list-09_The-400-Richest-Americans_Rank.html. You can also check out for more details of each of The Forbes 400 Richest Americans 2009 at www.forbes.com/2009/09/29/forbes-400_rich-list-09_all_slide_2.html.